Cerebras Systems Inc. (NASDAQ:CBRS) snapped a two-day losing streak on Monday, surging by as much as 19.2 percent in intraday trading to $261.08, as investors took heart from optimistic analyst coverage that highlighted growth prospects from its ongoing deal with OpenAI.
Wedbush said in a market note on the same day that it sees progression in the two firms’ existing deal with OpenAI following a disclosure last week that Cerebras Systems Inc. (NASDAQ:CBRS) will power the former’s Ultrafast model of GPT-5.6 Sol.
“While OpenAI is committed to taking 750MW of Cerebras capacity by 2028, we’d note the agreement is structured such that OpenAI can both extend the length of contracts around this capacity and/or contract for additional capacity through 2030,” it said.
For illustration purposes only. Photo from Pixabay/Pexels
OpenAI’s ultrafast mode is said to be 14x faster than the standard mode and is being rolled out to a small group of customers where lower latency is needed.
The AI firm also said that it sees encouraging scenarios for ultrafast, including incident response and reliability, financial research and security, customer support and voice, commerce, and live research and experimentation.
Cerebras Systems Inc. (NASDAQ:CBRS) and OpenAI inked a $20 billion deal in April this year, which aims to provide the AI firm with servers over the next three years.
OpenAI also agreed to support Cerebras Systems Inc. (NASDAQ:CBRS) with $1 billion in funding for the development of data centers that would run its AI products.
Higher Q2 Losses, But Cloud Revenues Soar
Last week, Cerebras Systems Inc. (NASDAQ:CBRS) said that it swung to a net loss of $450.5 million in the second quarter of the year from a $309 million net income in the same period last year, on the back of a 744 percent surge in operating expenses amid its ongoing expansion to support the AI buildout.
Total revenues, on the other hand, jumped by 75 percent to $180 million from $103 million, thanks to a 282-percent surge in revenues from cloud and other services.
“Our quarterly results exceeded our guidance across all core business metrics. The market has responded strongly to the value of fast inference. We significantly improved core gross and operating margins compared to a year ago,” Chief Finance Officer Bob Komin said.
“We have made rapid progress in key areas required to deliver exceptional growth against our remaining performance obligations of $25.4 billion, and plan to more than triple revenue in 2027,” he noted.
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