Cerebras beats revenue expectations and discloses Microsoft deal; shares jump 13%

Cerebras added Microsoft to its customer roster as it delivered quarterly revenue above Wall Street expectations on November 12. Shares jumped 13% in extended trading. The AI chipmaker’s new deal carries a later payoff: CEO Andrew Feldman expects it to begin generating revenue in the first quarter of 2027.

A hardware opening, then a revenue wait

Feldman’s pitch starts with the cost and availability of competing hardware. In an interview with CNBC, he said long delivery times and higher expense for graphics processing units, or GPUs, create an opportunity for Cerebras to sell its hardware. The company is trying to challenge Nvidia in the AI chip market.

Microsoft signed the agreement in October, Feldman said. He described the relationship ahead of Cerebras’s analyst call, scheduled for 5 p.m. Eastern time. The expected first-quarter revenue start puts the deal’s financial contribution beyond both the quarter just reported and the fourth-quarter outlook issued with these results.

Feldman also said Cerebras is evaluating financing options to meet rising demand, linking the commercial opportunity to the money needed to serve it.

$230.9 millionThird-quarter core revenue

Cerebras exceeded the $214.7 million LSEG consensus by $16.2 million.

70%Year-over-year core revenue growth

Core revenue rose from $135.7 million a year earlier.

Growth slowed, but the next quarter topped estimates

The revenue increase was substantial, though slower than the 103% year-over-year growth Cerebras recorded in the second quarter. Those figures describe the pace of growth, not a decline in revenue: third-quarter core revenue was still 70% higher than a year earlier.

The earnings comparison was less clear. Cerebras reported a loss of 67 cents per share, while analysts had expected a 14-cent loss. CNBC said it was not immediately clear whether those figures were comparable. The revenue result therefore provides a cleaner measure of the quarter against Wall Street’s expectations.

For the fourth quarter, Cerebras forecast revenue of $310 million to $330 million, above the $271 million analysts surveyed by LSEG expected. Even the bottom of the company’s range exceeds that estimate by $39 million.

Its margin outlook also cleared expectations. Cerebras projected a fourth-quarter core gross margin of 47% to 49%, compared with the 42.1% analyst estimate. Both ends of that range sit above consensus, so the stronger revenue outlook was accompanied by a stronger margin forecast rather than sales growth alone.

Tripling sales is not the same as beating consensus

The longer outlook carried a different comparison. Cerebras said it expects revenue to triple in 2027, implying about $2.85 billion. Analysts surveyed by LSEG were looking for $2.92 billion. That leaves the company’s implied forecast roughly $70 million below consensus, despite the scale of its expected annual growth.

The after-hours rally followed a difficult stretch for shareholders. Cerebras shares had fallen about 47% since its Nasdaq debut in May. The earnings reaction marked a sharp rise in extended trading, but it came against that larger decline rather than an uninterrupted run of stock-market gains.