Key Highlights

  • Shares trading down 17.79% pre-market to $215.43, reversing Wednesday's 11.63% regular-session gain
  • Total Q2 2026 Revenue of $180.1 million missed the $194.2 million consensus estimate as hardware sales declined
  • Core revenue, which excludes certain hardware sales, reached a record $209.9 million, up 103% year-over-year, beating guidance
  • Core cloud revenue surged 287% year-over-year on strong inference Demand tied to the company's OpenAI deployment
  • Raised full-year core revenue guidance to $880 million to $890 million
  • Several analysts including Wedbush, Morgan Stanley, and Needham reiterated bullish views and raised price targets despite the pullback

Shares Reverse Course as Headline Revenue Misses

Cerebras Systems (NASDAQ:CBRS) shares are sliding sharply in pre-market trading Thursday, down 17.79% to $215.43, reversing Wednesday's 11.63% regular-session gain after the AI chipmaker's mixed second-quarter report overshadowed otherwise record core cloud growth. Total revenue of $180.1 million missed the $194.2 million consensus as hardware sales declined, though the company's core revenue metric, which strips out certain hardware sales, reached a record $209.9 million, up 103% year-over-year and beating the company's own guidance.

Cerebras Systems is a Sunnyvale, California-based artificial intelligence infrastructure company that designs and manufactures advanced AI compute platforms built around its proprietary Wafer-Scale Engine, the industry's only commercial chip that spans an entire silicon wafer, delivering superior speed and performance over traditional GPUs for Training and inference workloads. Its flagship CS-3 systems integrate hardware, software, power, cooling, and interconnect into rack-mountable, data-center-to-supercomputer-scale solutions, complemented by cloud-based access via Cerebras Cloud and partner marketplaces such as AWS, Microsoft, and IBM watsonx.

Core Cloud Revenue Surges on Inference Demand

Core cloud and other services revenue grew 287% year-over-year to $127.7 million, driven by strong inference demand tied to the company's OpenAI deployment, while core hardware revenue rose 17% to $82.1 million. Core gross Margin was 40.6%, up roughly 940 basis points year-over-year, and core operating loss narrowed to $33.6 million, an improvement of roughly 2,600 basis points. The company raised full-year 2026 core revenue guidance to $880 million to $890 million and narrowed its core Operating Margin guidance to negative 19% to negative 17%.

Despite the post-earnings selloff, several analysts including Wedbush, Morgan Stanley, and Needham reiterated bullish views and raised price targets, citing improving cloud margins, more than 600 megawatts of secured Data Center capacity, and Cerebras' expanding neo-cloud and AI inference opportunity as reasons to look past the near-term revenue miss.

Conclusion

Cerebras Systems' 17.79% pre-market decline reflects investors reacting to a headline revenue miss driven by softer hardware sales, even as the company's core Business metrics, including cloud revenue and full-year guidance, all pointed to accelerating momentum. With several analysts reiterating bullish views and raising price targets despite the pullback, the stock's next moves will likely hinge on whether the market comes to view core revenue growth as the more representative measure of the company's trajectory.