Cerebras Systems Reports Better-Than-Expected Revenue, Touts Major Microsoft Deal as Stock Soars 17% in Extended Trading

Cerebras Systems reported better-than-expected revenue and quarterly guidance in its earnings report on Thursday, while also touting a significant new commercial deal with cloud giant Microsoft. The positive announcements sparked an immediate and enthusiastic response from investors, sending the company’s stock soaring by 17% in extended trading following the market close.

The latest financial results offer a fresh window into the trajectory of Cerebras as it works to carve out a distinct space within the intensely competitive artificial intelligence hardware landscape. According to the company’s official financial statement, Cerebras’ core revenue grew by 70% during the quarter from $135.7 million. While this performance demonstrates robust ongoing demand, it follows a 103% growth rate recorded in the second quarter, marking a slight deceleration in percentage terms while maintaining impressive absolute momentum.

Speaking in an interview with CNBC, Andrew Feldman, the co-founder and chief executive officer of Cerebras Systems, pointed to market conditions that continue to favor alternative hardware vendors. Feldman noted that ongoing supply chain dynamics, particularly the long lead times and high expenses associated with traditional graphics processing units, are creating meaningful commercial openings for the company’s specialized hardware solutions.

"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," Feldman told CNBC, emphasizing how infrastructure bottlenecks across the broader technology sector are driving potential buyers to explore alternative options for accelerating artificial intelligence workloads.

Beyond the core quarterly metrics, executive leadership prepared to announce a major new relationship with Microsoft, one of the world’s premier cloud service providers, during a scheduled conference call with financial analysts and investors. Feldman noted that the details of this partnership would be unpacked during the call, which was set to begin at 5 p.m. Eastern Time.

According to the Cerebras chief executive, Microsoft formally signed the agreement in October, and the company anticipates that the partnership will begin translating into tangible top-line revenue starting in the first quarter of fiscal 2027. This high-profile win with Microsoft adds to a growing roster of major cloud infrastructure partners for Cerebras, which has already landed deals with other industry heavyweights including Amazon and Oracle, underscoring the company’s growing traction among major hyperscalers.

As demand ramps up across its customer base, Feldman indicated that the company is actively evaluating its financing options to ensure it has the necessary capital and operational runway to support its rapid growth trajectory. Scaling production and deployment to meet the surging requirements of enterprise and cloud customers demands significant capital investment, making financial strategy a key priority for executive leadership.

The strong earnings report and partnership announcements arrive during a turbulent and transformative period for the broader artificial intelligence chip market. Cerebras is positioning itself as a direct challenger to Nvidia, the dominant force in AI hardware. Intriguingly, the release of Cerebras’ financial results coincided with a massive seismic shift at its primary rival: Nvidia CEO Jensen Huang resigned from the company he co-founded amid a series of scandals involving extramarital affairs. This leadership vacuum at the helm of the industry leader adds an unexpected layer of volatility to the competitive landscape as emerging players like Cerebras look to capture market share.

Looking ahead to the final quarter of the fiscal year, Cerebras offered robust guidance that comfortably surpassed Wall Street expectations. The company projected a core gross margin ranging from 47% to 49%, alongside anticipated revenue between $310 million and $330 million. These figures significantly outpaced the consensus estimates compiled by LSEG, where surveyed analysts had been anticipating a core gross margin of 42.1% and revenue of $271 million.

For the full year 2027, Cerebras stated that it expects its revenue to triple, an ambitious forecast that implies approximately $2.85 billion in total revenue for the year. This projection stands remarkably close to the consensus views of Wall Street analysts surveyed by LSEG, who had previously modeled full-year revenue expectations at $2.92 billion.

Despite the optimism surrounding Thursday’s financial release and guidance, Cerebras shares have faced a challenging public market journey since the company first made its debut on the Nasdaq exchange in May. Prior to the post-earnings surge in extended trading, the company’s stock had slumped by about 47% from its initial public offering price, reflecting investor caution regarding profitability, valuation, and the immense capital expenditures required to compete with established semiconductor giants. However, the latest revenue beats, robust forward guidance, and the newly minted Microsoft partnership suggest that the company’s strategic positioning is beginning to resonate more strongly with the investment community.