On August 12, 2026, Cerebras Systems Inc. (NASDAQ:CBRS) shares tumbled about 14% in extended trading, even after the AI chipmaker’s second-quarter revenue rose 74.3% year over year and it raised its full-year guidance for the second time since going public in May 2026.
Why This Matters
Cerebras positioned itself as a genuine Nvidia challenger at its May 2026 IPO. This quarter’s mixed results, a revenue miss paired with a smaller-than-expected loss, test how investors read a business leaning more on cloud revenue than chip sales.
That raises the real question: is Cerebras becoming a cloud-services company that happens to make chips, rather than the chip challenger investors bought into?
The Bull Case: Cerebras
Total second-quarter revenue rose 74.3% year over year to $180.1 million, though that missed the $194.2 million analysts expected, according to LSEG. The adjusted loss narrowed sharply to 5 cents a share, well inside the 17 cents analysts modeled and below the $40.5 million adjusted loss posted a year earlier. CEO Andrew Feldman said AI demand is “through the roof,” as fast-inference pricing lifts margins. Cerebras Systems Inc. (NASDAQ:CBRS) raised its full-year core revenue guidance to $880 million to $890 million, up from $855 million to $865 million, and lifted its annual adjusted gross margin target to 41% to 43% from 38% to 41%. The firm ended the quarter with $25.4 billion in remaining performance obligations. OpenAI can now use Cerebras chips for its latest model. Despite the post-earnings slide, shares closed that day at $262.06, still up 42% from the $185 IPO price.
The Bear Case: Cerebras
The headline number is still unattractive: Cerebras posted a GAAP net loss of $450.5 million for the quarter, compared with a $309.5 million profit a year earlier. Even though most of that swing came from $386.6 million in stock-based compensation costs rather than the underlying business. Hardware sales, including its core AI chips, actually declined to $54.1 million from $70.3 million a year earlier, which means more of Cerebras Systems Inc. (NASDAQ:CBRS)’s growth now comes from renting back its own systems to cloud customers than from selling chips outright. Gross margin fell to 40.6% from 46.5% in the prior quarter for the same reason.
Morgan Stanley analysts said “execution remains the key debate” given the scale and speed of the capacity buildout required. Both Citi and Mizuho trimmed their price targets after the results.
The Bull and Bear Case: Advanced Micro Devices
Cerebras and Advanced Micro Devices, Inc. (NASDAQ:AMD) partnered in July 2026 to combine their chips in AMD’s Helios AI systems. Cerebras CEO Andrew Feldman said the companies’ combined system delivers five times higher tokens per second per watt than competing setups. Feldman said demand for ultra-low-latency AI responses is becoming a necessity, and “people want to use it, and they want to use it quickly,” a dynamic that benefits AMD’s broader AI systems business regardless of how Cerebras Systems Inc. (NASDAQ:CBRS)’s own stock performs.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s low-latency ambitions face direct competition from Nvidia, which spent $20 billion acquiring Groq’s assets in December 2025 to build similar technology into its own systems. This means AMD’s edge from the Cerebras partnership may not last.
Insider Monkey’s Hedge Fund Data
Cerebras Systems Inc. (NASDAQ:CBRS)’s holder count was not confirmed in the current hedge fund dataset, likely because its May 2026 IPO fell after the Q1 2026 filing period. Advanced Micro Devices, Inc. (NASDAQ:AMD) was held by 134 hedge funds as of Q1 2026, up from 132.
Conclusion
Cerebras posted a basic improvement this quarter with a narrower loss and stronger guidance. However, investors focused on the revenue miss and the still large GAAP loss instead.
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Disclosure: None. This article is originally published at Insider Monkey.
