Cerebras Systems (NASDAQ:CBRS) Shares Gap Up on Better-Than-Expected Earnings

Cerebras Systems Inc. (NASDAQ:CBRS)’s share price gapped up before the market opened on Friday following a stronger than expected earnings report. The stock had previously closed at $97.75, but opened at $108.70. Cerebras Systems shares last traded at $109.99, with a volume of 10,852,729 shares traded.

The company reported $0.13 earnings per share for the quarter, beating analysts’ consensus estimates of ($0.13) by $0.26. The company had revenue of $230.87 million during the quarter.

Cerebras Systems News Roundup

These are some of the CBRS news items that stood out recently:

• Positive Sentiment: Cerebras reported record third-quarter core revenue of $230.9 million and EPS of $0.13, above the cited consensus estimate of a $0.13 loss. Cloud revenue grew sharply year over year, supporting the view that demand for its AI computing services is expanding. Reuters: Cerebras shares surge as profit surprise and forecast raise ease AI-spending worries
• Positive Sentiment: A newly announced Microsoft deal and wins with two hyperscalers add credibility to Cerebras’ effort to compete in AI computing. The company reported 700 megawatts of data-center capacity under contract. CNBC: Cerebras surges after revenue beat and Microsoft deal
• Negative Sentiment: Some execution risks remain: direct sales of AI chips fell, and Cerebras has delayed delivery of AI capacity to OpenAI amid data-center construction delays. These issues could limit near-term revenue realization despite strong demand. Cerebras delays OpenAI capacity delivery

Analyst Ratings Changes

CBRS has been the topic of a number of recent analyst reports. Wedbush dropped their price target on shares of Cerebras Systems from $290.00 to $190.00 and set an “outperform” rating on the stock in a research report on Monday. Morgan Stanley reduced their price objective on shares of Cerebras Systems from $279.00 to $178.00 and set an “overweight” rating for the company in a research note on Monday. Wall Street Zen raised shares of Cerebras Systems from a “sell” rating to a “hold” rating in a report on Saturday, August 15th. TD Cowen lowered their target price on shares of Cerebras Systems from $275.00 to $175.00 and set a “buy” rating on the stock in a research note on Monday, October 19th. Finally, Jefferies Financial Group upgraded shares of Cerebras Systems to an “outperform” rating in a research note on Monday, October 5th. Two research analysts have rated the stock with a Strong Buy rating, ten have issued a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and an average target price of $251.80.

Insider Buying and Selling

In other news, CFO Robert Patrick Jr. Komin sold 32,500 shares of the business’s stock in a transaction dated Tuesday, September 29th. The shares were sold at an average price of $203.53, for a total transaction of $6,614,725.00. Following the transaction, the chief financial officer owned 30,670 shares in the company, valued at approximately $6,242,265.10. The trade was a 51.45% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Andrew Feldman sold 37,441 shares of the business’s stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $210.46, for a total transaction of $7,879,832.86. Following the transaction, the chief executive officer owned 16,853 shares in the company, valued at approximately $3,546,882.38. The trade was a 68.96% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 1,874,452 shares of company stock worth $383,719,154.

Hedge Funds Weigh In On Cerebras Systems

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Palumbo Wealth Management LLC lifted its position in shares of Cerebras Systems by 59.4% in the 3rd quarter. Palumbo Wealth Management LLC now owns 3,840 shares of the company’s stock worth $682,000 after acquiring an additional 1,431 shares during the period. AlphaGrep UK Ltd bought a new position in Cerebras Systems in the third quarter worth $435,000. Benjamin Edwards Inc. acquired a new stake in Cerebras Systems during the third quarter worth $694,000. BNP Paribas bought a new stake in Cerebras Systems in the 3rd quarter valued at $244,000. Finally, State Street Corp increased its holdings in Cerebras Systems by 15.2% in the 3rd quarter. State Street Corp now owns 549,086 shares of the company’s stock valued at $97,545,000 after buying an additional 72,423 shares during the period.

Cerebras Systems Stock Performance

The firm has a market cap of $25.23 billion and a P/E ratio of -1,344.96. The company has a debt-to-equity ratio of 0.02, a quick ratio of 5.80 and a current ratio of 5.82. The company’s 50 day simple moving average is $152.65.

Cerebras Systems Company Profile

Cerebras Systems develops computing systems and software designed for artificial intelligence and other compute-intensive workloads. Its products are built around the Wafer-Scale Engine, a large processor designed to support AI model training and inference, and include the CS-3 system and related software. The company also offers cloud-based access to its AI computing infrastructure, giving customers a way to run AI workloads without deploying its systems on site. Its offerings are aimed at organizations developing and operating large AI models, including businesses, research institutions and public-sector customers.