Cerebras Systems (CBRS) Earnings: Will Jumbo Chips Make for Outsized Post-IPO Gains?
Cerebras Systems (CBRS) reports earnings postmarket Tuesday, June 23 after its hotly-anticipated May initial public offering .
The AI infrastructure company saw heavy volume of 33.49M shares in its first day of trading but the stock has declined about -42% from its opening day highs of 386.34 on May 14.
Cerebras stands out because it has a unique method of manufacturing computer chips. Other chipmakers typically cut their chips out of a silicon wafer, which is a thin and flat circular section of extremely pure crystalline silicon that serves as the foundational base of computer chips and other types of electronic circuits. But Cerebras makes its chips out of the entire wafer, giving it the largest processors ever created. A Cerebras Wafer-Scale Engine 3 chip is roughly 58 times larger than an Nvidia (NVDA) Blackwell B200 chip, for example, and is roughly the size of a dinner plate with 4 trillion transistors versus the B200’s 208 billion.
Jumbo chip size matters. In addition to the processing speed advantages with these jumbo sizes, Cerebras products’ size provides enough physical space to directly embed RAM onto the chip itself. Other companies have to use off-chip memory, which is slower because the data has to travel farther distances. Cerebras says these unusual processes mean its systems can be substantially faster than traditional supercomputer clusters.
Here are three things to know about Cerebras.
- The Street is looking for a loss of -$0.14 per share and revenue of $180.7M for Cerebras’ first earnings report, according to several analyst estimates compiled by Zack’s. Consensus revenue estimates, however, have a wide range. The most important revenue segment to look for seems to be the Cloud & Services division showing forecasts of $542M for 2026, which analysts expect to eclipse Cerebras’ Hardware business.
- Analysts: Wedbush analysts said in a Monday report that supply dynamics will be a major factor for Cerebras earnings, and indicated Taiwan Semiconductor (TSM) manufacturing capacity is Cerebras’ primary bottleneck worry. Wedbush says that Cerebras must build meaningful share in the increasingly crowded AI accelerator market, but Cerebras faces limited demand risk in light its OpenAI and Amazon.com Inc. (AMZN) deals. Wedbush has a $270 price target and an outperform rating on CBRS. Other firms recently initiated coverage on the company, including Mizuho ($300, Outperform), UBS ($300, Buy), and Morgan Stanley ($250, Overweight).
- Technicals: Cerebras bottomed out at 196.73 on Jun. 5 and made a notably higher low during its next decline where it solidified at 202.28 on Jun. 16. These stand out as potentially supportive areas, while recent highwater marks to the upside include relative highs at 245.24 on Jun. 18, at 253.52 on Jun. 10, and 269.39 on May 27. Other technical information is sparse given the short time the stock has been trading, but a 20-day Simple Moving Average comes in at 228.59 while the Volume Profile Point of Control for the entirety of its trading is near 220 with another significant node between about 285 to 305. Meanwhile, the options market indicates the potential move range for the Jun. 26 weekly expiration at about +/-34 (+/-15.2%). This is notable because the lower edge is only slightly below the absolute lows near 197 and suggest traders are looking for this area of possible support to hold.
Tuesday’s Economic Data (ET)
· 8:15 AM: ADP Employment Change
· 9:45 AM: S&P Global PMI Flash
Notable Earnings
· Tuesday AM: Carnival Corporation Ltd. (CCL)
· Tuesday PM: FedEx Corporation (FDX), Cerebras Systems Inc. (CBRS), KB Home (KBH)
· Wednesday AM: Paychex, Inc. (PAYX)
· Wednesday PM: Micron Technology, Inc. (MU), Trip.com (TCOM)
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