Financial Report Forecast | Revenue soared 88% but predicted losses. Can Cerebras (CBRS.US) use OpenAI's big order to tell the profit story?
The Zhitong Finance App learned that on the eve of the AI chip star Cerebras Systems (CBRS.US), about to release its second-quarter earnings report, the market's attention is highly focused on the contradiction between its booming revenue and sudden pressure on profit margins. Whether the company can prove its large-scale profit path to investors after winning major customers such as OpenAI will be the key to influencing stock prices.
After the US stock market on August 12 (Wednesday) EST, Cerebras Systems, which just went public in May this year, will hand over it as the second report card of a listed company. According to the company's previous guidance, its core revenue for the second fiscal quarter is expected to be around US$194 million, an increase of 88% over the same period last year.
However, this strong year-on-year increase, on a month-on-month basis, was only a slight increase in core revenue of US$191.3 million in the first fiscal quarter, indicating a slowdown in short-term growth. Core revenue is a non-GAAP indicator used by Cerebras, which excludes items such as amortization of customer warrants and data center transfer revenue. Wall Street's current consensus forecast is similar to the company's guidance, with estimated revenue of approximately US$191 million.
Looking back at the first quarter, Cerebras' total revenue increased 94% year over year to US$193.4 million, with cloud and other services revenue soaring 178% to US$82.8 million, and hardware revenue rising 59% to US$116.6 million.
Profit margins are the biggest concern: lagging own production capacity drags down costs
Compared to revenue, investors will now take a more critical look at Cerebras' profit quality. Wall Street currently expects Cerebras to have a net loss of $0.17 per share, which is in stark contrast to earnings of $1.44 per share in the same period last year. Furthermore, the company warned in its previous financial report that the core gross margin for the second fiscal quarter would drop sharply to 36% to 38%, far below the level of 46.5% in the first fiscal quarter. Meanwhile, core operating margins are expected to be negative 30% to negative 32%.
The core reason for the sharp drop in gross margin is that in order to meet the current surge in AI inference demand, the company had to temporarily rent and rely on the customer's own systems (such as expensive computing power from G42) for delivery before the self-built data center is fully put into operation, which seriously erodes profits.
Wedbush analyst Matt Bryson clearly stated that data center space is Cerebras' biggest operating constraint at present, not wafer supply. Up to now, Cerebras has locked in about 215 megawatts of computing power capacity for 2026. Analysts believe that the faster the company's autonomous data center is launched, the sooner it can get rid of dependence on high-cost external computing power, and any profit margin improvement or inflection point signal may become an important catalyst for stock prices.
Heavy cooperation and new product expectations: supported by OpenAI's big order, WSE-4 is ready to be launched
Despite short-term profit pressure, Cerebras's business landscape is expanding rapidly. The company previously announced a multi-year computing power contract with OpenAI worth over $20 billion and a capacity of 750 megawatts. Meanwhile, Cerebras has established a multi-year partnership with Amazon (AMZN.US) AWS to bring its high-speed AI inference technology to the cloud. In addition, the company has also recently reached cooperation with CrowdStrike (CRWD.US) and AMD (AMD.US). Among them, AMD will integrate its Helios architecture and plan to provide it through Cerebras Cloud within the year.
Wedbush believes that the collaboration between CrowdStrike and AMD is likely not included in management's initial performance guidelines, which means that these two projects will bring further upside to performance in the coming quarters.
In terms of hardware iteration, Cerebras will host the annual Supernova conference on August 18. Wedbush anticipates that this will most likely be a window for the company to release the next generation WSE-4 processor (it is also not ruled out that management will announce relevant product updates in advance during the earnings call). WSE-4 is expected to achieve a performance leap from WSE-3, providing Cerebras with an opportunity to raise prices and improve profit margins. The benefits brought by it have also not been fully factored into current expectations.
Institutions are determined to be bullish: unique architecture avoids industry bottlenecks
Facing fierce competition from giants such as NVDA.US (NVDA.US), AMD, and Broadcom (AVGO.US), Cerebras recently had a cumulative decline of about 30% since its IPO. However, prior to the announcement of the earnings report, Wedbush remained firm in maintaining its “outperforming the market” rating and target price of $280.
Analyst Bryson emphasized that Cerebras' long-term logic has not changed: its wafer-level engine (WSE) uses SRAM instead of HBM memory, which is generally scarce in the industry, to bypass CoWOS advanced packaging restrictions, and continues to use 5nm instead of the more tight 3nm process. As 2026 enters the second half and moves towards 2027, the industry-wide memory supply and pricing environment continues to deteriorate, and Cerebras's radically different architectural positioning will become more and more valuable.
The market is awaiting more clear signals from management in this financial report: when new production capacity will be launched on a large scale, when the OpenAI and AWS contract will begin to contribute real revenue, and whether the full-year performance outlook can be maintained or raised. These answers will determine whether this AI chip challenger can regain market confidence.