SUNNYVALE, California, August 13, 2026, 16:15 PDT — U.S. cash markets had closed, but after-hours trading was still underway.
- Cerebras dropped 12% following its second-quarter report, offsetting a 12% increase seen on Wednesday.
- Cloud revenue increased by 281%, while GAAP gross profit declined by 20%.
- Management increased its core revenue and margin forecast for 2026.
Shares of Cerebras Systems NASDAQ:CBRS fell approximately 12% on Thursday, even though the company reported a more optimistic full-year forecast and a 103% increase in core revenue.
The headline does not capture the main worry for investors. Even though cloud sales almost increased fourfold, GAAP gross profit dropped by about 20%.
The focus on capacity expenses and accounting changes becomes crucial for valuation. Cerebras needs to convert swift cloud uptake into sustained cash returns.
| Q2 metric | 2026 | 2025 | Change |
|---|---|---|---|
| GAAP revenue | $180.1 million | $103.3 million | up 74% |
| Cloud and services revenue | $126.0 million | $33.0 million | up 281% |
| Hardware revenue | $54.1 million | $70.3 million | down 23% |
| GAAP gross profit | $25.6 million | $32.1 million | down 20% |
Cloud and services accounted for 70% of GAAP revenue in the quarter, up from 32% the previous year. Hardware declined by $16.2 million over the same period.
GAAP gross margin fell to 14% from around 31%. The company’s main metric rose to 41%, increasing by roughly 9.4 percentage points.
| Q2 metric | GAAP | Core non-GAAP | Gap |
|---|---|---|---|
| Revenue | $180.1 million | $209.9 million | $29.8 million |
| Gross margin | 14% | 41% | 27 points |
| Operating margin | -265% | -16% | 249 points |
Core revenue does not include $14.5 million in pass-through sales and incorporates $44.3 million in customer-warrant amortization. This creates a $29.8 million difference, which is 16.5% of GAAP revenue.
Chief Financial Officer Bob Komin stated that the use of rented computing capacity lowered adjusted gross margin by approximately five points. He anticipates that increasing the share of owned capacity will help reduce that impact.
| 2026 core outlook | Current | Previous | Midpoint change |
|---|---|---|---|
| Revenue | $880–$890 million | $855–$865 million | +$25 million |
| Gross margin | 41%–43% | 38%–41% | +2.5 points |
| Operating margin | -19% to -17% | -32% to -28% | +12 points |
Cerebras benefits from a strengthened balance sheet. The company held $8.6 billion in cash, restricted cash, and short-term investments. Its remaining performance obligations stood at $25.4 billion.
Chief Executive Andrew Feldman stated, “The demand for fast inference is enormous and Cerebras is scaling to meet it.” Cerebras currently has over 600 megawatts of data-center capacity either operational or secured via contracts through 2027. Cerebras
Cerebras is a rival to Nvidia NASDAQ:NVDA in inference computing. The company’s wafer-scale architecture eliminates the need for high-bandwidth memory and advanced packaging, both of which face industry-wide constraints.
Wall Street sentiment is still upbeat, although the reaction to earnings has tested that view. Analysts at Morgan Stanley stated, “Execution remains the key debate given the scale and speed of the capacity build required.” Reuters
| Analyst | Firm | Recommendation | Price target |
|---|---|---|---|
| Atif Malik | Citi | Buy | $340 |
| Timothy Arcuri | UBS | Buy | $320 |
| Quinn Bolton | Needham | Buy | $300 |
| Joseph Moore | Morgan Stanley | Buy | $273 |
| Matt Bryson | Wedbush | Buy | $280 |
The recommendations were made before the most recent report and could be updated. As of the latest snapshot from Google Finance, there were ten buy ratings, with no holds or sells.
Investors are set to monitor target adjustments and capacity benchmarks next week. Shares rose 11.6% on Wednesday, then reversed course on Thursday.
Risks: Cerebras relies on major clients and rapid capacity expansion. Setbacks, low utilization rates or intensified price rivalry may stop the upgraded outlook from turning into GAAP profitability.
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