Cerebras Shares Fall 11% After Q1 Loss Widens Despite $20B OpenAI Deal
CBRS•Cerebras posted Q1 revenue of $193.4 million, up 94%, but reported a wider-than-expected adjusted loss that drove shares down 11% overnight. Its new $20 billion, 750MW OpenAI supply agreement through 2028 comes as 86% of last year’s revenue was tied to UAE-affiliated customers.
1. Q1 Financial Performance
Cerebras reported Q1 revenue of $193.4 million, a 94% year-over-year increase, with hardware sales rising 59% to $110.6 million and cloud services nearly tripling to $82.8 million. Despite outpacing revenue estimates, the company posted a wider-than-expected adjusted loss, triggering an 11% overnight share drop.
2. $20B OpenAI Supply Agreement
The company secured a $20 billion supply agreement with OpenAI for 750MW of ultra-low-latency AI compute capacity, scheduled to be deployed in multiple tranches through 2028. This deal includes a $1 billion facility and warrant payments, forming the bulk of Cerebras’s $24.6 billion backlog.
3. Customer Concentration Concerns
UAE-affiliated customers, notably G42 and Mohamed bin Zayed University of Artificial Intelligence, accounted for 86% of last year’s revenue, highlighting a concentration risk. Patrick Moorhead warned that swapping one major customer for another may not diversify risk and flagged ongoing margin pressure and cash burn as critical issues.
4. Investor Sentiment and Institutional Buys
Retail sentiment on social platforms swung to ‘extremely bullish’ following the earnings release. Cathie Wood’s ARK Investment Management bolstered confidence by purchasing $5.8 million worth of Cerebras shares during the session.
