Key Takeaways
- Cerebras shares jumped 15% after third-quarter core revenue rose 70% and it raised its outlook.
- Microsoft is a new cloud customer, but OpenAI still makes up most of Cerebras’s $26.1 billion backlog.
- Tripling revenue in 2027 would land a bit below analysts’ expectations.
- Late data centers are holding back cloud growth, as at Nebius, and Microsoft revenue in early 2027 is the next test.
Cerebras Systems (CBRS) is up 15% today after its third-quarter report, and the biggest news is a new cloud customer: Microsoft (MSFT).
Microsoft already buys AI computing from Nebius (NBIS), so Cerebras is now going after the same hyperscaler dollars.
Microsoft helps, but OpenAI still dominates
Third-quarter core revenue rose 70% to a record $230.9 million, led by a 272% jump in core cloud revenue. Cerebras co-founder and CEO Andrew Feldman told CNBC that Microsoft signed in October and that its revenue should start showing up in the first quarter of 2027. Still, CFO Bob Komin said on the call that OpenAI makes up the majority of Cerebras’s $26.1 billion of remaining performance obligations.
Tripling is about what analysts expected
Feldman said in the release that Cerebras expects to “triple revenue in 2027.” Tripling the middle of its new 2026 range of $940 million to $960 million gives about $2.85 billion. That’s a bit below the 2027 consensus going into the report:
The bigger beat is closer in. Fourth-quarter core revenue guidance of $310 million to $330 million tops the $275 million consensus. Expect higher 2026 estimates, but less reason to lift 2027.
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Data centers are the bottleneck
Cerebras said on the call that delays with land, power and construction put it behind on early capacity deliveries to OpenAI, so fourth-quarter cloud revenue should be roughly flat.
Nebius is fighting the same battle. Its third-quarter revenue rose to $980.8 million from $146.1 million, and it plans $40 billion of spending for 2027. Cerebras has $7.8 billion of cash and investments, and Feldman told CNBC it’s evaluating financing options. I wouldn’t be surprised if it raised more money.
Cheaper than it’s been
Cerebras ended Thursday at 16x forward sales, against an average of 35x since it listed and a peak of 63x:
The way I see it, Microsoft makes Cerebras look a lot less like a bet on one customer, and investors aren’t paying much for that yet. The catch: until its data centers come online, Cerebras can’t fully deliver on the OpenAI contract behind most of its backlog. The first Microsoft revenue, in early 2027, is the next proof.
So what is Cerebras stock actually worth?
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