CBRS

Cerebras Systems (NASDAQ:CBRS) has been cut in half. Shares of the artificial intelligence (AI) computing specialist peaked at $386.34 on their first day of trading in May, a day after the company priced its initial public offering (IPO) at $185 and raised $6.4 billion. As of this writing, the stock trades around $184 -- about 52% below the high, and just under that IPO price. A decline like that usually follows a stumble: a guidance cut, a lost customer, a bad quarter. Cerebras hasn't had one. Shares dropped double digits anyway the day after its mid-August update, arguably the company's strongest yet and one in which management raised its outlook for the year. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Yet even at half price, the stock costs about 145 times the earnings analysts expect the company to generate next year. What did the fall reprice -- the business, or just the price tag? Image source: Getty Images. It wasn't the business. In its mid-August update, Cerebras reported core revenue (a measure that strips out pass-through data center revenue and adds back a noncash deduction tied to customer warrants) of $209.9 million, up 103% year over year, with core gross margin improving to 41% and core operating margin to negative 16%. In other words, the company still loses money, but far less of it on every dollar of sales. And management raised its full-year outlook to a range of $880 million to $890 million in core revenue, up from a prior range of $855 million to $865 million. The cloud business is driving the growth, and the growth is accelerating. Cloud and other services revenue, as reported under generally accepted accounting principles (GAAP), was $33 million in the year-ago quarter, about $83 million in this year's first quarter, and $126 million in the second, up 281% year over year. Renting out computing is increasingly the story -- the cloud side supplied 70% of the company's reported revenue in the latest quarter, up from about a third a year ago. Whatever cut the stock in half, it wasn't the fundamentals. What changed is what buyers will pay for that growth. Analysts expect Cerebras to earn about $1.25 per share next year. At around $184, the stock costs about 145 times those expected earnings. And measured against the same estimate, May's $386.34 peak worked out to about 310 times next year's expected earnings. That, I'd argue, is the honest reading of the sell-off. Investors didn't mark down Cerebras' business. They marked down what they were willing to pay for it. Even now, buyers are paying for profits that are still mostly forecast. For today's price to make sense, earnings have to grow into it. Suppose the stock eventually traded at 30 times earnings -- still a premium price for most businesses. At about $184 per share, Cerebras would need to earn about $6 per share annually, nearly five times what analysts expect for next year. The bull case is that much of the growth needed to get there is already under contract. Cerebras ended June with $25.4 billion in remaining performance obligations (work customers have committed to pay for but the company hasn't yet delivered), much of it tied to a single agreement under which OpenAI committed to purchase 750 megawatts of AI computing capacity. Cerebras expects about $5.6 billion of that balance, or 22% of it, to become revenue over the 24 months ending June 30, 2028. "We have made rapid progress in key areas required to deliver exceptional growth ... and plan to more than triple revenue in 2027," chief financial officer Bob Komin said in the company's second-quarter earnings release. Sure, revenue could triple next year. The contracts support it. But revenue isn't earnings. After all, Cerebras ran a core operating loss last quarter even with sales doubling, and most of the backlog converts after mid-2028. The profits the price depends on are still years of execution away, and the timing can shift. So, what did the halving reprice? Mostly the price tag. The business is in better shape than it was in the spring, and the backlog gives Cerebras' growth plans unusual visibility. But at about 145 times next year's expected earnings, the stock still assumes years of rapid growth and a smooth swing to profitability, and it leaves little room for the timing to slip. Ultimately, cut in half isn't the same as cheap. I'd stay on the sidelines at this price. If Cerebras starts turning that backlog into profits, and not just revenue, I'd take another look. Before you buy stock in Cerebras Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cerebras Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $420,109!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,303,689!* Now, it’s worth noting Stock Advisor’s total average return is 938% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 16, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cerebras Stock Has Been Cut in Half. It Still Costs About 145 Times Next Year's Estimated Earnings. was originally published by The Motley Fool

BigBear.ai (NYSE:BBAI) generates revenue by providing artificial intelligence-powered predictive modeling and security consulting services to enterprise and government clients. During the summer, it established a new equity offering program to support future business operations, gained international regulatory approval for airport security screening software, and appointed a new board member, while concurrently reporting an operating margin of -74% for the quarter ended June 30, 2026. Cerebras Systems (NASDAQ:CBRS) earns revenue by selling specialized computing hardware and software to data centers and large enterprises. During the summer months, it announced a new multi-year data center capacity agreement in Finland, expanded an existing manufacturing relationship, and faced multiple legal investigations regarding potential securities law violations, while posting an operating margin of -265% for the quarter ended June 30, 2026. Revenue serves as a crucial foundational metric that shows investors the total amount of money a business successfully brings in from core day-to-day business operations before any normal operating expenses, corporate taxes, legal costs, or routine overhead charges are deducted. Tracking this top-line financial figure helps investors understand the total scale and top-line growth trajectory of a business. Data source: Company filings. Data as of Sept. 11, 2026. BigBear.ai and Cerebras Systems are capitalizing on the artificial intelligence boom in different ways. The former is providing AI software primarily to governments, while the latter focuses on specialized semiconductor hardware to deliver superior speed to AI systems. Examining their revenue trends spell out which is garnering stronger customer adoption. BigBear.ai experienced several recent quarters of year-over-year sales declines, finally breaking the trend in the second quarter with 13% growth over the prior year. The increase was thanks to its acquisition of Ask Sage, an AI platform tailored to the needs of governments. Cerebras Systems saw the opposite, with revenue rising every quarter until dipping to $180.1 million in Q2. The recent decline was due to a drop in its hardware sales. Even so, on a year-over-year basis, Q2 revenue was still higher than in 2025, demonstrating that the company continues to see customer demand for its specialized AI offerings. BigBear.ai's uneven year-over-year sales growth compared to Cerebras' consistency suggests the latter's focus on AI hardware is a winning formula while the former's software business targeting governments is more susceptible to revenue downturns. Before you buy stock in BigBear.ai, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BigBear.ai wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $417,413!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,294!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 13, 2026. Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. BigBear.ai vs. Cerebras Systems: What Quarterly Revenue Trends for These Artificial Intelligence Companies Tell Investors was originally published by The Motley Fool

A month has gone by since the last earnings report for Cerebras (CBRS). Shares have lost about 17.2% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Cerebras due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. Cerebras reported a second-quarter 2026 loss of 4 cents per share, narrower than the Zacks Consensus Estimate, delivering an 80.95% earnings surprise. Core revenues of $209.87 million rose 103% year over year and topped the consensus estimate by 8.09%. The upside was led by rapid adoption of fast inference services. Core cloud and other services revenues surged 287% year over year to $127.7 million, while remaining performance obligations (RPO) reached $25.4 billion. Core cloud and other services revenues nearly quadrupled from $33 million a year earlier, reflecting the ramp-up of the OpenAI deployment and higher usage from other cloud customers. Core hardware revenues rose 17% year over year to $82.1 million.Management said the revenue mix can vary significantly from quarter to quarter depending on the timing of large cloud-capacity additions and hardware shipments. Demand remained strong, with several late-stage hardware opportunities representing hundreds of millions of dollars and additional cloud deals targeted for 2027. Cerebras signed new cloud-capacity agreements with AI coding companies Cognition and Lovable. It cited Block, Figma, AlphaSense and GSK among customers using fast inference for agentic workflows.The company highlighted CrowdStrike as an example of a new security use case, where low-latency large language model inference can inspect enterprise traffic inline. Management also said six deals worth more than $30 million each were signed during the quarter. The company enabled support for OpenAI's GPT-5.6 Sol at 750 tokens per second. Cerebras also expanded its disaggregated inference strategy with AMD, pairing GPU-based prefill processing with Cerebras systems for decoding.Management said the AMD configuration can maintain Cerebras’ speed while increasing throughput by up to fivefold and is expected to enter production in the fourth quarter of 2026. A similar disaggregated inference offering with AWS is expected to become generally available through Amazon Bedrock in the first quarter of 2027. In the second quarter of 2026, core gross margin was 40.6%, up about 940 basis points year over year. Core cloud and other services gross margin was 41.8%, while core hardware gross margin came in at 38.8%. Sequential margin pressure reflected the temporary use of higher-cost systems rented back from cloud customers.Operating expenses totaled $502.8 million. Research and development expenses were $320.2 million, sales and marketing expenses were $87 million, and general and administrative expenses were $95.7 million. The sharp increase in reported expenses included substantial stock-based compensation costs.Adjusted EBITDA was a loss of $53.1 million compared with a loss of $38.3 million in the prior-year quarter.Core operating loss was $33.6 million compared with $43.9 million a year earlier and core operating margin improved to negative 16% from negative 42%. The balance sheet strengthened meaningfully. As of June 30, 2026, cash, cash equivalents, restricted cash and short-term investments totaled $8.6 billion. The company has access to an $850 million revolving credit facility, which remained unused at quarter-end.For the first six months of 2026, net cash used in operating activities was $47.5 million. Purchases of property and equipment totaled $548.9 million as the company continued investing in the data center and infrastructure capacity needed to support future growth. For the third quarter of 2026, Cerebras expects core revenues to be in the range of  $214-$216 million. Core gross margin is projected between 38% and 40%, while core operating margin is expected between negative 25% and negative 23%.For 2026, management raised core revenue guidance to $880-$890 million. Core gross margin is expected to be 41%-43%, while core operating margin is projected between negative 19% and negative 17%. Management expects core revenues to more than triple in 2027. Cerebras has secured more than 600 megawatts of data center capacity that is either live or under contract for delivery by the end of 2027. Its pipeline of additional data center opportunities is measured in gigawatts, as available capacity remains a key constraint on revenue growth.Manufacturing capacity is expected to increase more than tenfold in 2026, supported by new factory lines at Flex, Sanmina and Rocket EMS. The company secured TSMC wafer supply and highlighted that its architecture does not require High Bandwidth Memory (HBM), CoWoS packaging or 3-nanometer fabrication technology. In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 57.9% due to these changes. At this time, Cerebras has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cerebras has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Cerebras belongs to the Zacks Technology Services industry. Another stock from the same industry, Duolingo, Inc. (DUOL), has gained 0.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Duolingo reported revenues of $298.45 million in the last reported quarter, representing a year-over-year change of +18.3%. EPS of $0.66 for the same period compares with $0.91 a year ago. Duolingo is expected to post earnings of $0.55 per share for the current quarter, representing a year-over-year change of -42.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -2.4%. Duolingo has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cerebras Systems Inc. (CBRS) : Free Stock Analysis Report Duolingo, Inc. (DUOL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The firm also bought 69,585 shares of Cerebras Systems and 47,794 shares of Cloudflare. Wood’s asset management firm sold 37,977 shares of competing chipmaker Advanced Micro Devices. Broadcom is expected to post its third-quarter (Q3) earnings results on Sept. 2 after market hours. Cathie Wood’s ARK Investment Management loaded up on Broadcom Inc.’s (AVGO) shares on Wednesday, coinciding with chipmaker Nvidia Corp.’s (NVDA) earnings release. Across its ARK Innovation ETF (ARKK), ARK Autonomous Technology & Robotics ETF (ARKQ), and ARK Next Generation Internet ETF (ARKW), the asset management firm purchased a total of 57,705 AVGO shares, worth more than $20 million as of the last close. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox The firm also bought 69,585 shares of Cerebras Systems Inc. (CBRS) and 47,794 shares of Cloudflare Inc. (NET). AVGO stock was up nearly 2% in the overnight session late Wednesday. In addition to adding the aforementioned technology stocks, Wood’s asset management firm sold 37,977 shares of Advanced Micro Devices Inc. (AMD), another competing chipmaker. ARK also sold shares of Tempus AI Inc. (TEM), Twist Bioscience Corp. (TWST), Robinhood Markets Inc. (HOOD), Brera Holdings PLC (SLMT), CrowdStrike Inc. (CRWD), and Roblox Corp. (RBLX). Broadcom is expected to post its third-quarter (Q3) earnings results on Sept. 2 after market hours. RBC Capital analyst Srini Pajjuri maintained a ‘Sector Perform’ rating and $400 price target on AVGO shares ahead of its Q3 results. According to The Fly, the firm said that it expects a slight beat and raise for the quarter, driven by the company's Networking business. The analyst also noted that Broadcom's TPU share remains a focus amid competition from MediaTek and Alphabet Inc.’s (GOOG, GOOGL) Google, which recently forged a supply agreement with Marvell Technologies Inc. (MRVL). RBC also added that Broadcom's long-term contract and expanding TPU adoption beyond Google should support continued growth for the next few years. According to data from Fiscal.ai, analysts expect the company to post revenue of $29.43 billion, up 84.5% compared to $15.95 billion reported in the previous comparable quarter. Earnings per share (EPS) is expected to come in at $3.24, up from $1.69 posted in Q3 2025. Nvidia reported second-quarter (Q2) revenue of $96.2 billion, more than doubling from a year earlier, while adjusted EPS reached $2.22, beating Wall Street estimates. Data center revenue grew to $89 billion, ahead of expectations, with Alphabet and Amazon among key hardware adopters. For the third quarter, Nvidia expects revenue of $108 billion, above the $103.9 billion consensus, with gross margins around 74%. On Stocktwits, retail sentiment around AVGO stock was ‘bullish’ at the time of writing, with an increase of about 22% in chatter over 24 hours, as per platform data. One user said, “$AVGO Monster in making.” Another user said, “UP quite a bit in overnight trading. More than usual . Tomorrow should be a good day.” A third user said, “$AVGO loading zone!!! Lots of analysts came out with price targets above 500 recently. see you at 450 in 2 weeks time post killer Earnings report.” AVGO shares have gained more than 18% in the last one year. For updates and corrections, email newsroom[at]stocktwits[dot]com. Aashika Suresh has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: ZenaTech Named 2026 “Drone Technology of the Year” Winner by AgTech Breakthrough Awards for Its ZenaDrone Precision Agriculture Solutions INFQ Stock’s Quantum Rally Gets A NASA Boost: $20M Contract Has Retail Chasing Massive Upside CRWD Stock Sees Biggest Single-Day Surge In Over A Year: Wall Street Sees ‘Mythos Moment’ Boosting Cybersecurity Demand, But One Analyst Is Skeptical

Interested in Snowflake Inc.? Here are five stocks we like better. MarketBeat's five most-upgraded stocks over the past 90 days are all software companies, including Snowflake, Okta, Datadog, CrowdStrike, and Palo Alto Networks. Analysts cite these companies' ability to directly monetize the AI boom, through consumption-based data platforms, AI agent identity security, and cloud observability, as the driver of upgrades. All five stocks have posted strong year-to-date gains and carry consensus Moderate Buy ratings, but several trade near price targets ahead of upcoming earnings that could test valuations. When analysts collectively raise their price targets and ratings on a single group of stocks, it pays to notice. Upgrades reflect where Wall Street's research desks see the earnings power and momentum heading next, and when they cluster tightly around one theme, that clustering could potentially mark the early stage of a leadership rotation. Right now, something worth flagging is happening on MarketBeat's most-upgraded stocks list: the five names drawing the heaviest analyst enthusiasm over the past 90 days are all software companies. Now, this is not entirely a coincidence. After a brutal stretch earlier in the year that saw software badly lag the AI hardware trade, the group has come roaring back. The iShares Expanded Tech-Software Sector ETF (BATS: IGV) has climbed about 9.65% over the past quarter, comfortably outpacing the broader S&P 500. This comes as capital has rotated out of the crowded, expensive semiconductor, memory, and neo-cloud names and into software companies that are now proving they can monetize AI in their own right. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? The five names below sit at the center of that shift, and here is why analysts can't stop upgrading them. Snowflake (NYSE: SNOW) runs a cloud-based data platform that lets enterprises store, analyze, and share massive volumes of data across every major public cloud. It has become one of the purest ways to play a simple reality: artificial intelligence is only as good as the data feeding it, and analysts have taken note. → Travel + Leisure Goes Big—Is It Ready to Rally? The stock is up about 51% year-to-date, and the upgrades keep coming. Just last week, Truist raised its price target to $375, well above the current price, and the consensus rating among 40 analysts is Moderate Buy. And the overarching sentiment and theme driving the narrative is fairly straightforward. Snowflake's consumption-based model means that as customers build and run more AI workloads, they consume more Snowflake, turning the AI boom into a direct revenue tailwind. With earnings just around the corner, due Sept. 2, analysts have been confidently lifting targets and ratings ahead of what many expect to be another strong quarter. Okta (NASDAQ: OKTA) is the leading independent provider of identity and access management, the software that controls who can log in to what across an organization's digital footprint. Long viewed as a mature, steady grower, the company has found a fresh catalyst in the AI era, where securing not just human identities but autonomous AI agents has become a rapidly expanding need. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects That narrative and organic, strategic shift, if you will, has powered the stock by almost 57% this year, and the analyst community has moved quickly, rating it as a consensus Moderate Buy. In just the past week alone, JPMorgan raised its price target to $165, and Cantor Fitzgerald reaffirmed its Buy rating. Morgan Stanley and KeyCorp reiterated their Overweight ratings on the stock, with both price targets implying over 27% upside. The company's improving profitability, paired with its emerging role in securing AI agents, has reframed what was once seen as a forgotten software name. The company is set to report its Q2 results on Aug. 26, so investors can expect another round of analyst actions. Heading into the print, the stock has spent several months consolidating in the upper band of its 52-week range, with $130 acting as critical support and $156 as the major breakout level. Datadog (NASDAQ: DDOG) provides cloud monitoring and observability, giving engineering teams real-time visibility into the health and performance of their applications and infrastructure. As enterprises pour money into AI and cloud workloads, the need to monitor those increasingly complex systems grows right alongside it, placing Datadog squarely in the flow. The stock has been a standout sector and industry performer, up about 73% year to date, and it carries the most attractive upside target in this group. The consensus rating across 45 analysts is Moderate Buy, with an average price target of $276.32, implying more than 17% upside from current levels. Datadog's Q2 2026 report on Aug. 6 actually beat expectations, and while the stock sold off on that print amid a stretched valuation, analysts have used the subsequent pullback to reiterate their conviction. The company reported earnings per share (EPS) of 65 cents, comfortably topping the estimate of 58 cents, while quarterly revenue grew 35.6% over the prior year, also beating estimates. CrowdStrike (NASDAQ: CRWD) is the dominant force in cloud-native cybersecurity, protecting endpoints, cloud workloads, and identities through its Falcon platform. It has become the enterprise standard in an era when AI is enabling attacks at machine speed, and that structural tailwind has kept analysts firmly in its corner. Shares are up almost 64% year to date, and the company has continued to draw positive analyst action, including recent target raises tied to its new partnership with Cerebras (NASDAQ: CBRS) to accelerate its AI security capabilities. The consensus across 50 analysts, the deepest coverage of this group, is Moderate Buy. One honest flag to note is that, after its powerful run, the stock has recently pulled back and now trades near the consensus price target, so much of the near-term optimism might already be priced in. But that structure could change soon, with earnings expected on Aug. 26 after the market closes. Expectations are running hot for CRWD, with the consensus estimate calling for an almost 26% year-over-year increase in earnings and about 23% growth in sales over the prior quarter. Palo Alto Networks (NASDAQ: PANW) is the largest pure-play cybersecurity company in the world, consolidating firewalls, cloud security, and AI-driven security operations into a single platform. Its platformization strategy, getting customers to adopt its entire security stack rather than piecemeal tools, has made it the default enterprise choice as companies race to secure their AI deployments. No name on this list has performed better in 2026, with the stock up an eye-catching 94% year to date as of Friday’s close. Palo Alto also has the strongest news sentiment score in the group, and it just launched a Frontier AI defense program to protect enterprise AI systems. The consensus across 48 analysts is Moderate Buy. As with several of its peers, the valuation is now rich and the stock trades close to its average target, so the burden shifts to its upcoming earnings report, expected around Sept. 1, to justify the enthusiasm. Institutional activity in Palo Alto has been rampant, with a whopping net inflow over the prior 12 months. Over the prior year, more than $51 billion in total institutional inflows have been recorded, versus just $4.4 billion in outflows. Ahead of the company's all-important Q2 report, its current institutional ownership percentage is nearly 80%. Five stocks, one sector, and a wave of analyst upgrades that is hard to ignore. What connects these names is a shared realization on Wall Street: software is no longer the laggard of the AI trade but an increasingly direct beneficiary of it, whether through consumption-based data platforms, identity security for AI agents, or observability for sprawling cloud systems. The upgrades reflect that shift in thinking. But the caution, as is often the case in this market, is valuation. Several of these names have run hard and now trade near their targets, with earnings reports looming that will separate the leaders from the laggards. However, one thing remains clear: when analysts move this decisively on an entire group, it is usually a signal worth respecting. The article "5 of the Most-Upgraded Stocks Over the Last Quarter Are All Software Names—Here's Why" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Core Revenue: $209.9 million, up 103% year over year. Core Cloud and Other Services Revenue: $127.7 million, up 287% year over year. Core Hardware Revenue: $82.1 million, up 17% year over year. Core Gross Margin: 40.6%, up approximately 940 basis points year over year. Core Cloud and Other Services Gross Margin: 41.8%, up 1,600 basis points year over year. Core Hardware Gross Margin: 38.8%, up 510 basis points year over year. Core Operating Loss: $33.6 million, with core operating margin of negative 16%, an improvement of approximately 2,600 basis points year over year. Remaining Performance Obligations (RPO): $25.4 billion as of June 30, 2026. Cash and Marketable Securities: More than $8.6 billion in cash equivalents, restricted cash, and marketable securities. Q3 2026 Guidance: Core revenue expected between $214 million and $216 million; core gross margin between 38% and 40%; core operating margin between negative 25% and negative 23%. Full Year 2026 Guidance: Core revenue raised to $880 million to $890 million; core gross margin raised to 41% to 43%; core operating margin raised to negative 19% to negative 17%. Warning! GuruFocus has detected 2 Warning Sign with CBRS. Is CBRS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record core revenue of $209.9 million, up 103% year-over-year, beating guidance on all metrics. Core cloud and services revenue surged 287% year-over-year to $127.7 million, reflecting strong demand for fast inference. Core gross margin improved significantly to 40.6%, up 940 basis points year-over-year, with expectations to reach 60%+ in the future. Secured over 600 megawatts of data center capacity, with a pipeline in gigawatts, supporting massive growth plans. Strategic partnerships with AMD and AWS for disaggregated inference expand market opportunities and improve economics. RPO stands at $25.4 billion, providing strong revenue visibility and confidence in future growth. Manufacturing capacity expected to increase more than 10x in 2026, with further expansion planned for 2027. Strong balance sheet with over $8.6 billion in cash and investments, plus an unused $850 million credit facility. Technology advantages include no reliance on HBM or 3nm fab capacity, reducing supply chain risks. New customer wins in coding, agentic flows, and security (e.g., Figma, Cognition, CrowdStrike) diversify revenue streams. Core gross margin declined sequentially to 40.6% from 46.5% in Q1 2026 due to higher costs from renting back systems. Q3 2026 core gross margin expected to be the low point at 38-40%, with operating margin guidance of -25% to -23%. Heavy customer concentration risk, with OpenAI expected to remain a significant portion of revenue in 2027. Data center capacity remains a bottleneck, limiting growth despite securing 600 megawatts. Core operating loss of $33.6 million, though improving, indicates ongoing profitability challenges. Disaggregated inference solutions are not yet commercially deployed, with availability expected only in Q4 2026. AWS partnership revenue not yet reflected in RPO, with first revenues expected only in mid-2027. Potential competitive pressure from AMD's recent acquisition of an inference hardware company. Full-year 2026 core revenue guidance of $880-890 million implies a slowdown in growth from Q2's 103% year-over-year pace. Rising costs from renting back systems and building out capacity may pressure margins in the near term. Q: How should we think about customer concentration next year, given the ramp with OpenAI and the potential for AWS to contribute around $1 billion? Will two-thirds of revenue come from these two customers, and can you speak to talks with other hyperscalers like Google and Microsoft? A: Andrew Feldman, Co-Founder and CEO, acknowledged that OpenAI will remain a meaningful portion of revenue next year but emphasized that the company's history shows a pattern of expanding its customer base with each major win. He noted that AWS and other rapidly growing segments like coding and security will become a larger portion of the business, causing OpenAI to shrink as a percentage of revenue over time. He did not provide specific concentration percentages but reiterated that OpenAI will still be significant in 2027. Q: Can you walk us through the economics of the Amazon (AWS) deal? Will it be available next year through AWS's Bedrock platform, and how should we forecast demand? A: Andrew Feldman confirmed that the Cerebras solution is deployed in Amazon data centers and will be delivered through AWS's Bedrock API service. He stated that the service is expected to be generally available in Q1 2027, and the company is currently organizing deployments. He did not provide specific revenue forecasts but indicated that the partnership expands Cerebras's market opportunity and global reach. Q: Regarding the AMD disaggregation partnership, can you provide more detail on the go-to-market strategy with the Helios rack and the timeline to revenue? Also, how does AMD's recent acquisition of an inference hardware company fit into your broader offering? A: Andrew Feldman stated that the joint solution, combining AMD's Helios racks for prefill and Cerebras systems for decode, is extremely compelling and already has buyers. He noted that additional parts of the arrangement will be announced over time. Regarding AMD's acquisition, he expressed respect for the innovative hardware but suggested that the first application for that technology is unlikely to be data center inference, and he does not see it as a direct competitor to the Cerebras-AMD partnership. Q: Is the AMD disaggregation deal structured so that Cerebras purchases the Helios racks, installs them in its cloud, and retains all revenue from customers renting the solution, or is there a revenue-sharing agreement? A: Andrew Feldman confirmed the first part of the question, indicating that Cerebras purchases and stands up the Helios racks in its own cloud and retains the revenue from the disaggregated inference service. This model allows Cerebras to increase throughput and profitability per system without sharing the revenue stream. Q: With the AWS deal being installed in their clouds first, do you see a path to hosting Trainium and CS3 together in your own cloud or other hyperscale clouds in the future? A: Andrew Feldman expressed strong interest in this approach, noting that there is a precedent for hyperscalers deploying their own parts outside their data centers, as seen with Google. He stated that this is very much on the table for the future with AWS and potentially other partners, which would further expand Cerebras's disaggregated inference capabilities. Q: If you purchase and stand up AMD Helios racks in your Cerebras cloud and deliver that service to OpenAI under your contract, does that represent an additional revenue opportunity? A: Andrew Feldman explained that increasing throughput while maintaining speed increases the revenue opportunity per system. He noted that the disaggregated solution makes each system more profitable by generating more tokens, reducing cost per token, and improving margins. He declined to discuss specifics of the OpenAI relationship but emphasized that the partnership with AMD and AWS enhances both top-line growth and margin expansion. Q: You mentioned increasing throughput of the wafer-scale engine by 20x by the end of 2027. Does that remove the need for disaggregated compute, or does it just make the heterogeneous solutions even more powerful? A: Andrew Feldman stated that the company is exploring all avenues to drive throughput up, including both improvements to its own systems and disaggregated solutions. He noted that a 20x throughput increase with stable costs would be highly beneficial, and the company's roadmap is focused on continuing its pattern of industry-leading performance while vastly increasing throughput across all solution types. Q: Where are you in terms of commercialization of disaggregated decode? Is it ready to deploy now, and what work needs to be done over the next year to achieve the improvements you're discussing? A: Andrew Feldman confirmed that disaggregated inference with GPUs is currently running in Cerebras's labs and is expected to be deployed and available in Q4 2026. He indicated that the technology is progressing rapidly and will be commercialized in the near term. Q: Will the disaggregated solutions with AMD and AWS work better than using NVIDIA's installed base of GPUs? A: Andrew Feldman stated that newer, top-of-tree generation hardware, such as AMD's Helios racks and AWS's Trainium 3, will provide better performance in disaggregated solutions than older generations. However, he emphasized that even previous-generation GPUs would be vastly better in a disaggregated solution than not in one, making it an important option for operators looking to extend the life of their existing hardware. Q: You mentioned securing 600 megawatts of data center capacity and a 10x increase in manufacturing capacity by year-end. Will this help accelerate ramps in 2027? A: Andrew Feldman confirmed that the company is aggressively pursuing data center capacity globally to meet the tremendous demand for fast inference. He noted that faster deployment of data centers directly accelerates revenue growth for both the cloud business and on-prem hardware customers. He emphasized that the company has a dedicated team and is engaged at every stage of construction to keep projects on track. Q: How is the pipeline developing with the emerging "neo-cloud" group, given the new financing structures being developed across Wall Street? A: Andrew Feldman noted that while neo-clouds were initially focused on NVIDIA, many are now diversifying and becoming less dependent on a single hardware vendor. He stated that opportunities in this category are large, with neo-clouds that are multi-vendor, AMD-only, or emerging from power asset owners. He expects this to be an important part of Cerebras's business in 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

The Cerebras purchase came after ARK bought millions of dollars worth of Nvidia shares in recent weeks. The purchases of CBRS stock were split between the ARK Innovation ETF and ARK Next Generation Internet ETF. Wall Street’s reaction to Cerebras’ results was mixed, but Mizuho and UBS both viewed the post-earnings decline as an opportunity to buy the stock. After buying Nvidia (NVDA) for weeks, Cathie Wood’s ARK Invest doubled down on one of the chipmaker’s most closely watched challengers, Cerebras Systems (CBRS) after its earnings-driven selloff. ARK purchased 106,941 Cerebras shares worth $28.02 million on August 13, according to the firm's daily trade disclosures. The purchases were split between the ARK Innovation ETF (ARKK) and ARK Next Generation Internet ETF (ARKW). See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox CBRS stock dropped nearly 3% at market open on Friday, after a 12% drop in the previous session following the firm’s earnings report. On Stocktwits, retail sentiment around the shares trended in ‘extremely bullish’ territory, accompanied by chatter at ‘extremely high’ levels. ARK’s increase in Cerebras stake comes after weeks of buying Nvidia shares. The fund bought roughly $15.4 million of Nvidia shares on July 28, followed by about $17.6 million on August 5. The following week, ARK purchased another 122,422 shares worth about $26.6 million across its funds. Wall Street’s reaction to CBRS earnings was mixed on Thursday. However, most agreed that the drop in CBRS stock was a “buying opportunity.” Mizuho lowered its price target to $300 from $310 and said it was a “buyer of the stock.” Meanwhile, UBS hiked its price target to $330 from $320 and stated that the pullback was a “compelling buying opportunity.” Cerebras is viewed as a challenger to Nvidia (NVDA) because while it makes a different type of chip than the classic Nvidia GPU, it’s the size of a dinner plate. It uses Wafer-Scale Engine technology to keep an entire 300-millimeter silicon wafer intact as a single processor. Cerebras reported adjusted loss per share of $0.05, beating Wall Street’s estimates of a $0.18 loss per share cited by Koyfin. Revenue came in at $209.9 million, ahead of the $194 million consensus estimate. It also raised its full-year 2026 revenue outlook to $880 million to $890 million, above its previous forecast of $855 million to $865 million. The company also expects third-quarter core revenue of $214 million to $216 million, ahead of the consensus of roughly $212 million. However, Cerebras’ adjusted gross margin fell to 40.6% in the second quarter, from 46.5% in the preceding three months. Chief Financial Officer Bob Komin said on the post-earnings conference call that the roughly five-percentage-point decline was driven by higher costs to rent computing capacity that Cerebras had previously deployed for other customers. The margin pressure comes as the company rapidly expands its manufacturing capacity. Cerebras said it expects to increase that capacity by more than tenfold this year, adding infrastructure to meet growing demand for its AI systems. Read also: Chamath Palihapitiya Sees Palantir As A Potential Winner In 3-Year Shift To Model-Agnostic AI For updates and corrections, email newsroom[at]stocktwits[dot]com. Prabhjote Gill has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: NVDA Discloses $21B Stake In SpaceX — Elon Musk’s Rocket Firm Becomes Nvidia’s No. 2 Holding Berkshire Hathaway Makes Alphabet Its No. 3 Holding After 48M Share Buy Berkshire Hathaway Makes Alphabet Its No. 3 Holding After 48M Share Buy

Cerebras Systems CBRS shares have dropped a massive 12% since it reported second-quarter 2026 results on Wednesday (Aug. 12). The company delivered core revenues of $209.9 million, which jumped 103% year over year, while core cloud and other services revenues surged 287% year over year. However, CBRS’ third-quarter 2026 core revenue guidance of $214-$216 million implies only about 2-3% sequential growth from the second quarter of 2026, which failed to impress investors. Cerebras also acknowledged that quarterly revenues can vary significantly depending on the timing of large cloud-capacity additions and hardware shipments. Investors may also have reacted negatively to the expected deterioration in profitability during the third quarter of 2026. Cerebras shares are also trading at a premium, as suggested by the Value Score of D. So, what should investors do with the CBRS stock post the dip? Let us find out. In the second quarter of 2026, core gross margin declined 590 basis points (bps) sequentially to 40.6% in the second quarter of 2026 as Cerebras temporarily rented systems back from customers to satisfy strong inference demand. The company expects the third quarter of 2026 to represent the trough, with core gross margin guided to 38-40%, while core operating margin is expected to deteriorate to negative 25-23% from negative 16% in the second quarter of 2026. Although management expects margins to recover as higher-cost rented capacity is replaced by Cerebras-owned systems, the near-term margin pressure likely tempered enthusiasm around the revenue outlook. For 2026, Cerebras now expects core gross margin between 41% and 43% while operating margin in the negative 19-17% range.Cerebras is also perceived as risky by investors due to customer concentration and dependence on OpenAI. Revenues remain concentrated among a small number of customers as three customers individually represented 34%, 32% and 10% of second-quarter 2026 revenues, while a significant portion of Cerebras’ $25.4 billion remaining performance obligations (RPO) is tied to its OpenAI agreement. The company acknowledged that OpenAI will remain a meaningful contributor in 2027, even though its share of revenues should decline as AWS and other customers scale. Moreover, conversion of RPO into revenue requires substantial infrastructure deployment. Roughly 22% of CBRS’ RPO is expected to be recognized during the first 24 months through June 2028, while another 43% in months 25-48 and the balance thereafter. Although this strong RPO provides exceptional long-term visibility, the risk remains with the timing of customer deployment decisions. Cerebras explicitly described data-center availability as an industry-wide bottleneck and said that even the more than 600 MW already live or contracted through 2027 is “not nearly enough” to meet demand.Cerebras’ prospects are suffering from stiff competition from the likes of NVIDIA NVDA, Advanced Micro Devices AMD and Intel INTC in the AI space. NVIDIA is dominating the AI GPU market through its Blackwell, Hopper, DGX/NVL systems that are used for AI training and inference. AMD’s MI300 and MI350 accelerator families are competing with CBRS in hyperscale AI infrastructure and enterprise AI clusters. Meanwhile, Intel’s Gaudi AI accelerators target enterprise AI training and inference as a lower-cost GPU alternative.In the past month, CBRS shares have jumped 25.5%, underperforming AMD, NVIDIA and Intel. Shares of AMD have dropped 8.4%, while NVIDIA and Intel returned 6% and 1.5%, respectively. Image Source: Zacks Investment Research Cerebras’ strong RPO provides the company with strong visibility into future demand. The company expects core revenue to more than triple in 2027 and continue growing at multiples in subsequent years as this contracted demand is converted into revenue. Importantly, CBRS said the existing RPO does not include backlog from AWS or other hyperscalers, suggesting additional hyperscaler wins could represent incremental upside rather than simply supporting the existing growth target.Cerebras is aggressively building the physical capacity needed to monetize demand. The company has secured more than 600 MW of data-center capacity that is either operating or expected to come online by the end of 2027, while its pipeline of additional opportunities is measured in gigawatts. Manufacturing capacity is expected to increase by more than 10 times during 2026 and expand further in 2027. CBRS has also secured the TSMC wafer supply required for its near-term growth plans and avoids several key industry bottlenecks because its architecture does not require HBM, CoWoS packaging or leading-edge 3nm fabrication.Moreover, Cerebras expects significant gains in both performance and throughput. The company plans to double system speed annually over the next several years and increase throughput by more than 20 times over roughly the next 18 months. Higher throughput means more tokens generated per system and per watt, lowering the cost of inference and increasing the revenue-generating capability of each data-center installation. This technology progression should be an important driver of longer-term gross-margin expansion, with Cerebras ultimately targeting core gross margins above 60%. The Zacks Consensus Estimate for CBRS’ 2026 loss is pegged at 89 cents per share, narrower than a loss of $1.14 per share over the past 60 days. Cerebras Systems Inc. price-consensus-chart | Cerebras Systems Inc. Quote The consensus estimate for third-quarter 2026 loss is pegged at 32 cents per share, narrower than a loss of 44 cents per share over the past 60 days. Cerebras’ near-term outlook remains clouded by margin compression, customer concentration and the execution risks associated with rapidly expanding data-center capacity. However, the company’s $25.4 billion RPO, expanding manufacturing footprint, strong liquidity position and differentiated wafer-scale architecture provide solid visibility into long-term growth. Partnerships with OpenAI and AWS, along with continued improvements in inference speed and throughput, should further expand its addressable market and support margin improvement over time. Moreover, Wall Street’s consensus price target implies roughly 24.32% upside from current levels. Image Source: Zacks Investment Research Cerebras currently has a Zacks Rank #2 (Buy), which implies that investors should start accumulating the stock right now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cerebras Systems Inc. (CBRS) : Free Stock Analysis Report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

CBRS dropped 14% after missing the revenue consensus by 7%, despite core revenue doubling and its cloud business nearly quadrupling year over year. SMCI surged 11% and INTC climbed 6% as Super Micro's blowout fiscal 2027 guidance lifted the entire AI hardware complex. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AMD didn't make the cut. Grab the names FREE today. Shares of Cerebras Systems (NASDAQ:CBRS) are down roughly 13% in midday trading on Thursday, changing hands near $225 after closing Wednesday at $262. The move stands out because most of the AI hardware complex is higher, with the sector outperforming the broader market average. Cerebras reported fiscal Q2 2026 results after the close Wednesday. GAAP revenue came in at $180.11 million, up 74% year over year but missing consensus of $193.55 million by 7%. GAAP EPS of -$2.98 looks catastrophic against a -$0.18 estimate, but the headline is heavily distorted by $377.0 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% to $125.99 million. Management also raised full-year 2026 core revenue guidance to $880 to $890 million from a prior $855 to $865 million, guided Q3 to $214 to $216 million, and disclosed remaining performance obligations of $25.4 billion with plans to more than triple revenue in 2027. CEO Andrew Feldman said, "This was an outstanding quarter for Cerebras. Core revenue more than doubled to $210 million, and our cloud business nearly quadrupled year-over-year." The market is punishing the consensus revenue miss, the GAAP optics, and a valuation that had run hot into the report. Cerebras IPO'd in May 2026 at $185 and had ripped higher since. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AMD didn't make the cut. Grab the names FREE today. Everything else in the AI logic and infrastructure trade is higher. Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) are riding broad enthusiasm for the AI trade rather than any single company catalyst today. In company-specific news, AMD is preparing a $5 billion debt offering while Intel received positive analyst commentary. UBS issued a note on Intel's $20 billion equity raise that framed it as "removing an overhang." There's also positive read-through from server companies. Yesterday Super Micro Computer (NASDAQ:SMCI) lit up the sector after guiding fiscal 2027 revenue to $65 billion to $72 billion versus Street expectations of $53.3 billion. Lenovo added fuel this morning, reporting April to June revenue of $26.94 billion, up 43% year over year, with an AI server pipeline that surged to $54 billion, up 157% sequentially. The read-through is spreading across memory, semiconductor equipment, interconnect, and AI server names, with Micron bid on memory pricing strength, Applied Materials participating on equipment demand, Marvell Technology one of the day's leaders on interconnect, and Dell Technologies catching an AI server tailwind after Morgan Stanley upgraded its US IT hardware view to In-Line from Cautious. Across the broader technology and AI infrastructure space, stocks are broadly rallying today witht he exception of Cerebras. SanDisk hosted its investor day today and forecast non-GAAP gross margins at 80% between 2028 and 2030. That's extremely bullish for memory companies, although its an unwelcome prediction for companies like Apple bearing the brunt of memory costs. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and AMD didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.