Cerebras Shares Jump 17% on Revenue Beat and New Microsoft Agreement

Cerebras Systems delivered quarterly revenue above Wall Street forecasts on Thursday and revealed a new agreement with Microsoft, sending its shares up 17% in extended trading.

The AI chipmaker reported core revenue of $230.9 million, ahead of the $214.7 million analysts polled by LSEG had anticipated. The company posted a loss per share of 67 cents, though it was not immediately clear how that figure compared with the loss of 14 cents analysts had expected.

Core revenue climbed 70% from $135.7 million a year earlier, according to the company's statement. That marked a deceleration from the 103% growth recorded in the second quarter.

Chief Executive Andrew Feldman told CNBC in an interview that the company sees an opening created by constraints in the broader chip market. "I think there is opportunity created by, particularly on the hardware side, the sale of hardware, where long lead times in GPUs and more expense creates opportunity for us," he said, referring to graphics processing units.

Feldman said executives would announce the new relationship with Microsoft, one of the world's top cloud providers, on a conference call with analysts scheduled to begin at 5 p.m. ET. He said Microsoft signed the deal in October and that the financial impact would take time to materialize. "We believe revenue begins to show up in Q1 '27," he said.

The Microsoft agreement adds to a growing list of cloud partnerships for Cerebras, which has also landed deals with Amazon and Oracle. Feldman said the company is evaluating its financing options to meet ramping demand.

Looking ahead to the fourth quarter, Cerebras projected a core gross margin of 47% to 49% on revenue of $310 million to $330 million. Analysts surveyed by LSEG had been looking for a 42.1% margin and $271 million in revenue.

The company also said it expects revenue to triple in 2027, which would imply roughly $2.85 billion for the year. Analysts polled by LSEG had forecast $2.92 billion.

Cerebras is attempting to challenge Nvidia in the market for artificial intelligence chips. Its earnings arrived on the same day that Nvidia CEO Jensen Huang resigned from the company he co-founded following multiple scandals involving extramarital affairs.

Despite Thursday's rally, Cerebras shares remain down about 47% since the company made its Nasdaq debut in May.