Is Cerebras Stock a Buy on the Dip as Revenue Surges?

Cerebras (CBRS +19.00%) shares took a hit after the inference chipmaker reported its first quarterly results as a public company after the bell on June 23. After surging on its opening day back on May 14, the stock has been on a steady decline since, and it traded below its $185 IPO price for a short period last week.

Let’s take a closer look at the company’s results to see whether this weakness presents a buying opportunity for the AI stock.

Cerebras posted strong revenue growth

Cerebras demonstrated rapid revenue growth in Q1, with sales surging 92% year over year to $193.4 million. Its net loss, meanwhile, narrowed to $14 million from $23.9 million a year earlier, while its adjusted loss was just $3.5 million. Hardware revenue climbed 60% year over year to $111.6 million, while core cloud and other service revenue surged 167% to $79.8 million.

The company also announced two major partnerships. It revealed that it signed a $20 billion multi-year deal with OpenAI in late December. It also announced a collaboration with Amazon‘s cloud computing unit, Amazon Web Services (AWS), to combine Amazon’s Trainium chip with Cerebras’ CS-3 system to be used within AWS data centers. Given the large size of Cerebras’ inference chips and the specialized cooling they require, it only sells them as a full system.

Looking ahead, Cerebras projected full-year 2026 core revenue to be between $855 million and $865 million, representing growth of around 69%. For Q2, it expects revenue to soar 88% to $194 million. It is seeking revenue to accelerate later in the year as cloud deployments ramp up. The AWS partnership will become a bigger contributor in 2027.

One area that disappointed investors was its gross margin guidance. After seeing gross margins expand from 42.1% a year ago to 46.5% in Q1, it forecast that they would drop to between 38% and 41% for the year. The company’s CEO later said investors were confused by its gross margin guidance, noting that the only reason they were set to fall was that it decided to rent back some capacity from an existing customer.

Is it time to buy the dip on Cerebras?

Cerebras is uniquely tackling the inference market with its wafer-sized SRAM-based chips. They have superior performance, but given their size and cooling needs, they cost more and right now remain a bit of a niche. However, with the OpenAI and AWS deals, the company has the opportunity to move its technology closer to the mainstream.

That said, with a market cap of around $40 billion and projected revenue of less than $900 million this year, this is an expensive stock. It really needs to show it can upend the inference market to justify its current valuation. As such, I’d consider it a highly speculative stock at this point.