Key facts
- Cerebras Systems' shares fell over 18% premarket after missing key financial estimates.
- The company's cloud business revenue quadrupled to $126 million, while hardware sales, including AI chips, declined.
- Second-quarter adjusted gross margin decreased to 40.6% from 46.5% in the previous quarter.
- Cerebras raised its annual revenue and gross margin forecasts, projecting 2026 adjusted revenue between $880 million and $890 million.
- The company is working to expand chip volumes to support a $20 billion multi-year agreement with OpenAI.
Cerebras Systems shares fell sharply after the AI chip designer missed key estimates despite soaring cloud revenue. While the company raised its annual forecasts, hardware sales declined, raising questions about its ability to compete with Nvidia. The company's cloud business revenue quadrupled to $126 million, while its hardware sales, including AI chips, declined to $54.1 million from $70.3 million a year ago. The second-quarter adjusted gross margin fell to 40.6% from 46.5% in the prior quarter. Cerebras Systems raised its annual revenue and gross margin forecasts, projecting 2026 adjusted revenue between $880 million and $890 million, and annual adjusted gross margin between 41% and 43%. The company is working to expand chip volumes to support a $20 billion multi-year agreement with OpenAI. In the second quarter, sales increased by 74.3% to $180.11 million, with an adjusted loss of $6.91 million, narrower than the $40.5 million loss a year ago. Revenue from cloud and services, reflecting the OpenAI ramp-up, nearly quadrupled to $127.73 million. Analysts at Morgan Stanley noted that execution remains a key debate given the scale and speed of capacity build required to support the ramp. Separately, Cisco Systems shares fell over 6% as its outlook fell short of expectations tied to its role in AI data center buildouts.