Cerebras Stock Drops 17% After Earnings Despite Doubling Its Revenue

Strong Numbers, Punished Anyway

Despite delivering second-quarter financial results that exceeded Wall Street's projections, Cerebras Systems watched its stock price tumble in extended trading — declining approximately 17% to roughly $219 after hours, erasing gains from a 12% rally during the regular trading session. It's a jarring disconnect: beat the estimates, get hammered anyway. But for investors in the AI chip space, the story behind the numbers matters just as much as the numbers themselves.

GAAP revenue came in at $180.11 million, up 74% year over year, but missed the consensus estimate of $193.55 million by 7%. The GAAP earnings-per-share figure of -$2.98 looks catastrophic against a -$0.18 estimate, but the headline is heavily distorted by $377 million of stock-based compensation and $44.3 million of customer warrant amortization. Strip those out and core revenue was $209.87 million, up 103%, with core gross margin of 40.6% and cloud revenue up 281%.

The Backlog Problem Investors Can't Ignore

Cerebras recorded a net loss of $450.5 million in Q2 — a dramatic reversal from net income of $309.5 million during the same quarter last year. The company's order backlog held steady at approximately $25 billion, and in high-growth technology companies, investors typically expect this metric to expand quarter over quarter. A flat backlog in a sector where momentum is everything sent a clear signal of worry to the market.

A significant portion of the $25 billion backlog stems from a long-term agreement with OpenAI for cloud-based access to Cerebras computing infrastructure. Analysts pressed management on customer concentration, especially with OpenAI and AWS expected to be major revenue drivers in 2027. CEO Andrew Feldman said OpenAI will remain important, but its share of revenue should shrink over time as AWS, other hyperscalers, and new customer categories grow.

A Company Still Finding Its Footing After a Landmark IPO

Cerebras went public on the Nasdaq in May, capitalizing on investor interest in semiconductors that can run AI models. It priced its offering at $185 and raised $6.4 billion — the largest semiconductor IPO of all time. The stock surged as high as $386 on its first day of trading before retreating sharply. The post-earnings selloff is just the latest chapter in what has been a volatile debut for the Sunnyvale-based chipmaker.

CEO Feldman said in an interview that AI demand is "through the roof" and that companies are paying up for its specialty inference chips. Cerebras is challenging AI chip leader Nvidia for some AI tasks, especially those that need low latency, or quick responses for interactivity — what the company calls "fast inference." In recent weeks, Cerebras also announced a partnership with AMD, with products going into production later this year, and said that OpenAI can use its chips to serve its latest model, GPT 5.6 Sol.

What Comes Next

The company raised its full-year outlook and now expects core revenue of between $880 million and $890 million, up from a prior range of $855 million to $865 million. The company also said it expects revenue to triple in the next fiscal year. Wall Street currently anticipates Cerebras will achieve adjusted operating profitability by 2027, and the current trajectory suggests this milestone could arrive on target or potentially ahead of schedule.

AWS Bedrock availability is expected in Q1 2027, with first revenues from AWS and other hyperscaler efforts expected in mid-2027. For a company that only went public three months ago, the road ahead is long — but the demand signals are real. Whether the market's patience holds long enough to see those deals convert into profit is the defining question hanging over Cerebras right now.