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CBRS' Backlog Rides on Strong AI Demand: Can it Outpace NVDA & AMD?
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Key Takeaways
CBRS had $25.4B in RPO and more than 600 MW of data-center capacity live or contracted by June 30, 2026.
CBRS core revenues surged 103% in Q2, while core cloud and other services revenues skyrocketed 287%.
CBRS targets gross margins above 60% as owned systems replace higher-cost rented infrastructure.
Cerebras Systems (CBRS - Free Report) is benefiting from a substantial backlog and improving operating economics, which are strengthening revenue visibility and supporting investments in artificial intelligence (AI) infrastructure. As of June 30, 2026, CBRS had $25.4 billion in remaining performance obligations (RPO). The company had also secured more than 600 MW of data-center capacity, either live or under contract to be delivered by the end of 2027, while its opportunity pipeline had expanded to gigawatt scale. This capacity buildout should help CBRS convert contracted demand into revenues while competing with NVIDIA (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) .
Revenue visibility extends beyond existing RPO. Management cited late-stage hardware deals worth hundreds of millions of dollars and significant new cloud opportunities for 2027. In the second quarter of 2026, core revenues surged 103% year over year to $209.9 million, while core cloud and other services revenues skyrockted 287% to $127.7 million. CBRS expects core revenues to more than triple in 2027 as capacity expands. Profitability trends are also improving. Core gross margin expanded about 940 basis points to 40.6%, while core operating margin improved roughly 2,600 basis points to negative 16%. Management expects gross margins to improve after the third quarter as higher-cost rented systems are replaced with lower-cost CBRS-owned systems, with a longer-term target above 60%.
CBRS also expects disaggregated inference to generate up to five times more tokens per CS system, while throughput could rise more than 20-fold through 2027. Its 5nm architecture and lack of reliance on HBM or CoWoS may reduce supply and cost pressures. With more than $8.6 billion in liquidity and an unused $850 million credit facility, CBRS has substantial flexibility to fund expansion and execute against its backlog.
CBRS Faces Tough Competition
NVIDIA is challenging CBRS through enormous scale, superior profitability, and strong forward visibility. In the second quarter of fiscal 2027, Data Center revenues reached $89 billion, while cloud industry backlog exceeded $2 trillion. NVIDIA expects fiscal 2028 revenues to grow about 70% despite supply constraints. Its NeoCloud partners are expected to reach 8 GW of installed capacity by year-end, while Vera Rubin has already received purchase orders from every major hyperscaler, AI cloud and system OEM. NVIDIA’s revenue opportunity per gigawatt has expanded from roughly $18 billion with Hopper to $40 billion with Vera Rubin, which is designed to deliver 30 times higher throughput per megawatt and 35 times lower token costs than Grace Blackwell Ultra.
Advanced Micro Devices is also increasing pressure on CBRS. In the second quarter of 2026, AMD’s Data Center revenues surged 107% year over year to $6.7 billion, driven by strong demand for EPYC processors and Instinct GPUs. Advanced Micro Devices has multi-generation gigawatt-scale deployments with OpenAI and Meta, while Anthropic plans to deploy up to 2 gigawatts of MI450 Series GPUs in AMD Helios racks. Helios demand is tracking ahead of Advanced Micro Devices' initial forecast and management expects Data Center revenues to grow well more than 100% in 2027. Helios is designed to deliver up to 15% more throughput at the same rack power and up to 30% more tokens per dollar than the competition, increasing AMD’s competitive presence in fast-inference workloads.
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CBRS' Backlog Rides on Strong AI Demand: Can it Outpace NVDA & AMD?
Key Takeaways
Cerebras Systems (CBRS - Free Report) is benefiting from a substantial backlog and improving operating economics, which are strengthening revenue visibility and supporting investments in artificial intelligence (AI) infrastructure. As of June 30, 2026, CBRS had $25.4 billion in remaining performance obligations (RPO). The company had also secured more than 600 MW of data-center capacity, either live or under contract to be delivered by the end of 2027, while its opportunity pipeline had expanded to gigawatt scale. This capacity buildout should help CBRS convert contracted demand into revenues while competing with NVIDIA (NVDA - Free Report) and Advanced Micro Devices (AMD - Free Report) .
Revenue visibility extends beyond existing RPO. Management cited late-stage hardware deals worth hundreds of millions of dollars and significant new cloud opportunities for 2027. In the second quarter of 2026, core revenues surged 103% year over year to $209.9 million, while core cloud and other services revenues skyrockted 287% to $127.7 million. CBRS expects core revenues to more than triple in 2027 as capacity expands. Profitability trends are also improving. Core gross margin expanded about 940 basis points to 40.6%, while core operating margin improved roughly 2,600 basis points to negative 16%. Management expects gross margins to improve after the third quarter as higher-cost rented systems are replaced with lower-cost CBRS-owned systems, with a longer-term target above 60%.
CBRS also expects disaggregated inference to generate up to five times more tokens per CS system, while throughput could rise more than 20-fold through 2027. Its 5nm architecture and lack of reliance on HBM or CoWoS may reduce supply and cost pressures. With more than $8.6 billion in liquidity and an unused $850 million credit facility, CBRS has substantial flexibility to fund expansion and execute against its backlog.
CBRS Faces Tough Competition
NVIDIA is challenging CBRS through enormous scale, superior profitability, and strong forward visibility. In the second quarter of fiscal 2027, Data Center revenues reached $89 billion, while cloud industry backlog exceeded $2 trillion. NVIDIA expects fiscal 2028 revenues to grow about 70% despite supply constraints. Its NeoCloud partners are expected to reach 8 GW of installed capacity by year-end, while Vera Rubin has already received purchase orders from every major hyperscaler, AI cloud and system OEM. NVIDIA’s revenue opportunity per gigawatt has expanded from roughly $18 billion with Hopper to $40 billion with Vera Rubin, which is designed to deliver 30 times higher throughput per megawatt and 35 times lower token costs than Grace Blackwell Ultra.
Advanced Micro Devices is also increasing pressure on CBRS. In the second quarter of 2026, AMD’s Data Center revenues surged 107% year over year to $6.7 billion, driven by strong demand for EPYC processors and Instinct GPUs. Advanced Micro Devices has multi-generation gigawatt-scale deployments with OpenAI and Meta, while Anthropic plans to deploy up to 2 gigawatts of MI450 Series GPUs in AMD Helios racks. Helios demand is tracking ahead of Advanced Micro Devices' initial forecast and management expects Data Center revenues to grow well more than 100% in 2027. Helios is designed to deliver up to 15% more throughput at the same rack power and up to 30% more tokens per dollar than the competition, increasing AMD’s competitive presence in fast-inference workloads.
CBRS’ Share Price Performance, Valuation & Estimates
Shares of Cerebras Systems have declined 36.7% in the past three months compared with the broader Zacks Business Services sector’s 12.6% decline.
CBRS Stock’s Price Performance
Image Source: Zacks Investment Research
Cerebras Systems currently has a Value Score of D, reflecting outstretched valuation.
Moreover, Wall Street’s consensus price target implies roughly 39.69% upside from current levels.
Price Target chart
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cerebras Systems loss is currently pegged at 13 cents per share, unchanged over the past 30 days.
Cerebras Systems Inc. Price and Consensus
Cerebras Systems Inc. price-consensus-chart | Cerebras Systems Inc. Quote
Cerebras Systems currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.