Cerebras faces first earnings test after volatile 13% options-implied swing

Cerebras Systems Inc. will report its first quarterly results as a public company after Tuesday's closing bell, with options pricing implying a 13% swing in either direction for the AI chipmaker's stock.

"The first quarter marks the beginning of a multiyear growth phase tied to our OpenAI partnership," Chief Executive Officer Andrew Feldman said in a statement ahead of the release.

Analysts project first-quarter revenue of $181 million to $183 million, an 82% year-over-year jump, according to Visible Alpha consensus estimates. The company is expected to report an adjusted loss of 16 cents a share. Cerebras will also introduce a "core revenue" metric that excludes contra-revenue charges tied to warrants granted to OpenAI.

The report comes just over a month after Cerebras priced its initial public offering at $185 a share in May. The stock surged as high as $386 on its first trading day before settling into a volatile pattern — 19 of the 25 trading sessions since have seen moves exceeding 3%. Shares closed Monday at $224.43, still up 21% from the IPO price but down 42% from the intraday peak.

The OpenAI factor

Cerebras' growth story hinges on a $20 billion multiyear cloud contract with OpenAI, which uses Cerebras hardware to host its Codex-Spark software coding model. The deal accounts for the bulk of the company's $24.6 billion backlog, with $3.7 billion expected to be recognized as revenue in 2026 and 2027.

The contract, however, introduces accounting complexity. Cerebras granted OpenAI warrants for 33.4 million shares at near-zero exercise price. As the company begins delivering on the agreement, it will record noncash contra-revenue charges that reduce reported revenue. Needham analyst Quinn Bolton said those charges will be modest in the first quarter but will grow as the OpenAI contract ramps.

Cerebras also holds a binding term sheet with Amazon Web Services that would mark the first major cloud provider to host its chips.

Wall Street's view

Eleven analysts have initiated coverage since the IPO, with an average price target of $294 and a Buy rating, according to FactSet. Wedbush set a $270 target, UBS a $300 target and Morgan Stanley a $250 target, all citing Cerebras' technology advantage in AI inference and its blue-chip customer base.

Analysts project core revenue — stripping out contra-revenue charges — to reach $7.2 billion by 2028, with adjusted earnings per share of $5.53. At Monday's close, the stock trades at 41 times that estimate.

Lockup expiration looms

A key risk arrives Thursday, when 13% of IPO shares become eligible for sale as the first lockup milestone expires. Only about 15% of total shares outstanding were sold in the IPO, meaning the thin float has amplified both rallies and selloffs. A second lockup trigger, releasing another 17% of shares, will follow two days after Cerebras reports second-quarter earnings.

The first quarter ended before the IPO, so the balance sheet and cash flow changes from the offering will not yet be reflected in Tuesday's report.

What this means for investors

The earnings report will test whether Cerebras' high valuation can be justified by accelerating revenue growth and expanding customer relationships. Investors will watch the core revenue metric and any updates on the OpenAI contract ramp for signs that the $24.6 billion backlog is converting into reported revenue. The lockup expiration on Thursday adds a near-term supply risk that could pressure the stock regardless of the earnings outcome.

This article is for informational purposes only and does not constitute investment advice.