Cerebras Earnings: Volatility, OpenAI Ties, and Lock-Up Expiry in Focus
(SeaPRwire) – By: Oliver Hawthorne
Cerebras (CBRS) is gearing up for a pivotal moment as it readies to report its first earnings as a public company this Tuesday. The chipmaker’s journey since its May IPO has been a rollercoaster, with the stock opening at $185 and skyrocketing to $386 on day one. Yet, recent trading has been far from serene—closing Monday at $224.43, and options traders are bracing for another big swing, pricing in a potential 13% move in either direction by week’s end. This sets the stage for a critical earnings report that could shape the stock’s trajectory in the near term.
Let’s start with the raw facts. Analysts project Q1 revenue of around $183 million, a staggering 82% year-over-year increase. However, the company remains in the red, with a consensus adjusted loss of 16 cents per share. The stock’s post-IPO performance tells a tale of extreme volatility: over 19 out of 25 trading days since the IPO, CBRS has moved more than 3% in a single session. Meanwhile, 11 analysts have initiated coverage with an average Buy rating and a $294 price target, suggesting optimism despite the recent turbulence.
A key element of the Cerebras story is its $20 billion multiyear cloud contract with OpenAI. OpenAI uses Cerebras’ cloud for its Codex-Spark coding model, but there’s a catch. Cerebras granted OpenAI warrants for 33.4 million shares practically for free, and as these warrants vest, they create a contra-revenue discount. In Q1, 4.5 million shares vested, and while Needham analyst Quinn Bolton notes the charge will be modest initially, it’s set to grow as the OpenAI deal scales. To help investors cut through the noise, Cerebras will report a “core revenue” figure excluding this contra-revenue. Additionally, the company has a binding term sheet with Amazon Web Services, making AWS the first major cloud provider to host Cerebras chips. By the end of 2025, the backlog stood at $24.6 billion, almost entirely from the OpenAI deal, with $3.7 billion expected to be recognized as revenue in 2026 and 2027.
But investors can’t ignore the lock-up expiry looming this Thursday. Nearly 13% of IPO shares will become eligible for insider selling, adding potential downward pressure on the stock. Only about 15% of total shares were sold during the IPO, with the rest locked up until two days after Q2 earnings are reported. This dual dynamic—strong growth projections and impending insider selling—creates a delicate balance. Analysts project core revenue of $7.2 billion by 2028, with adjusted EPS of $5.53. However, at Monday’s close, the stock traded at 41 times that 2028 earnings estimate, indicating lofty expectations.
The Q1 period ended in March, before the IPO, so the results won’t reflect the balance sheet and cash flow changes from the public offering. This means investors are essentially evaluating a pre-IPO performance with future growth potential. The OpenAI contract provides a long-term growth runway, but the immediate lock-up risk and short-term volatility demand caution. As CBRS reports its first earnings, investors will be parsing not just the top-line growth but also the implications of the OpenAI warrants and the upcoming lock-up expiry. The coming days will reveal whether the stock’s potential outweighs the near-term headwinds, making this earnings report a critical juncture for both the company and its investors.
Author bio: Oliver Hawthorne, Principal Correspondent at an international technology review, with extensive experience dissecting semiconductor and AI market trends, providing nuanced analysis of tech company performance and industry dynamics.