Cerebras (CBRS) Down 17.2% Since Last Earnings Report: Can It Rebound?

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 Q2 Earnings Beat Estimates, Revenues Increase Y/Y

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.

CBRS Cloud Business Drives Revenue Growth

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.

CBRS Sees Broader Customer Adoption

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.

Cerebras Deepens AI Infrastructure Partnerships

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.

CBRS’ Q2 Operating Details

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%.

CBRS Balance Sheet Supports Capacity Investments

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.

Cerebras Raises 2026 Outlook

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.

CBRS Builds Capacity for 2027 Expansion

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.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 57.9% due to these changes.

VGM Scores

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.

Outlook

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.

Performance of an Industry Player

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.

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