Cerebras Lifts 2026 Outlook to $960M as Cloud Revenue Nearly Quadruples

Cerebras Systems raised its 2026 core revenue forecast to as much as $960 million on Thursday, after third-quarter cloud revenue nearly quadrupled to $141.9 million and the wafer-scale chipmaker disclosed a deal with a top-three hyperscaler: Microsoft. Shares rose 18% in extended trading, CNBC reported, even though the stock had fallen about 47% since its May Nasdaq debut.

The numbers behind the jump are straightforward. GAAP revenue rose 55% year over year to a record $210.8 million. Cloud and other services, where customers rent Cerebras systems to run AI models, grew 265% from $38.9 million a year ago and up from $126.0 million in the second quarter. Hardware sales moved the other way, falling 29% to $68.9 million from $96.8 million.

Core revenue, the company's preferred non-GAAP measure, reached $230.9 million, up 70%. That beat both Cerebras' own guidance of $214 million to $216 million and the $214.7 million LSEG consensus, CNBC reported. The core figure adds back $36.4 million of amortized customer warrants and removes $16.4 million of data center pass-through revenue. The takeaway: the growth engine has shifted decisively from selling machines to renting inference capacity.

What did Microsoft sign, and when does it pay?

Chief executive Andrew Feldman told analysts that Microsoft signed the cloud agreement in October and that revenue should start in the first quarter of 2027, according to CNBC. Cerebras said sales to the top-three hyperscaler would be detailed next year. Oracle has also committed: it will offer Cerebras inference on Oracle Cloud Infrastructure in 2027.

"We exceeded our guidance across the board for the third quarter in a row," chief financial officer Bob Komin said. He added that the company's pipeline for high-speed inference grew more than tenfold during the quarter.

Where do margins and losses stand?

GAAP gross margin was 20%, down from 41% a year earlier, mainly because $36.4 million of customer-warrant amortization is deducted from revenue. Hardware gross margin fell to 11% from 50%. Core gross margin, which strips out that distortion, was 41%.

The net loss widened to $161.2 million, or 67 cents a share, from $22.2 million a year earlier, against the 14-cent loss LSEG analysts had expected. The picture is bigger than it looks: operating expenses more than tripled to $266.2 million, including $138.6 million of stock-based compensation, producing an operating loss of $224.1 million. Interest and other income of $63.9 million narrowed the bottom line. For comparison, the second-quarter net loss was $450.5 million, or $2.98 a share.

How strong is the guidance?

For the fourth quarter, Cerebras guided to core revenue of $310 million to $330 million, core gross margin of 47% to 49% and a roughly break-even core operating margin. LSEG estimates sat at $271 million in revenue and a 42.1% margin, CNBC reported.

The full-year 2026 core revenue outlook rose to $940 million to $960 million, from a prior range of $880 million to $890 million. Feldman said Cerebras expects to triple revenue in 2027, which CNBC calculated at about $2.85 billion, slightly below an LSEG estimate of $2.92 billion. In August he had promised to "more than triple" 2027 revenue.

What backs up the backlog?

Remaining performance obligations — contracted revenue not yet recognized — rose to $26.1 billion from $25.4 billion at the end of June. The company's release lists its Master Relationship Agreement with OpenAI among its customer-concentration risks. Cash, restricted cash and short-term investments fell to $7.8 billion from $8.6 billion as Cerebras pays for data centers, with $850 million of undrawn debt capacity still available.

On capacity, Cerebras said it has 700 megawatts of data center power under contract for delivery by the end of 2027, up from more than 600 megawatts in August, including new sites in Norway and Finland. It expects to exit 2026 with more than ten times the manufacturing capacity it had at the start of the year, through manufacturing partners Flex and Sanmina.

The next processor, Wafer Scale Engine 5, is in system testing for a CS-5 system targeted for early summer 2027. Last week Cerebras disputed a short seller's claim that its wafers last only two years.

If the Microsoft revenue starts on schedule in the first quarter of 2027 and the 700-megawatt buildout holds, Cerebras enters next year with a contracted backlog large enough to make the 2027 tripling target a test of execution rather than demand.