Cerebras surges 17% on Microsoft AI chip deal and surprise profit as Cisco forecasts $9 billion AI boom
Wafer-scale chipmaker Cerebras Systems jumped more than 17 percent after swinging to a surprise third-quarter profit and signing Microsoft as a hyperscaler customer, while networking giant Cisco reported its fastest revenue growth in 15 years and doubled its AI infrastructure target to $9 billion.
NEW YORK — Shares of artificial intelligence chip challenger Cerebras Systems surged more than 17 percent ahead of Friday’s opening bell after the Sunnyvale semiconductor maker swung to an unexpected quarterly profit, raised its revenue outlook, and disclosed a landmark cloud and hardware pact with Microsoft.
Paired with a blowout quarterly report from networking bellwether Cisco Systems, the upbeat numbers offered Wall Street tangible proof that corporate spending on AI data centers remains red-hot even as semiconductor investors digest Jensen Huang’s sudden resignation as chief executive of dominant GPU rival Nvidia.
Microsoft deal propels Cerebras to a surprise quarterly profit
Reporting third-quarter results under its Nasdaq ticker CBRS, Cerebras posted adjusted earnings of 12 cents per share—handily beating LSEG analyst expectations for a 14-cent loss—as core revenue climbed 70 percent year over year to $230.9 million, topping the $214.7 million consensus mark.
Chief executive Andrew Feldman told CNBC that Microsoft signed a commercial agreement with Cerebras in October, joining Amazon and Oracle among top-tier hyperscalers adopting the company’s dinner-plate-sized wafer-scale processors. Feldman said revenue from the Microsoft partnership will begin hitting the income statement in the first quarter of 2027, arguing that lengthy delivery wait times and steep prices for traditional graphics processing units are opening doors for alternative silicon architectures.
For the fourth quarter, Cerebras projected revenue between $310 million and $330 million alongside an expanded core gross margin of 47 to 49 percent, blowing past Wall Street’s $271 million revenue and 42.1 percent margin estimates. Management forecast total revenue to roughly triple in 2027 to approximately $2.85 billion, breathing fresh life into a stock that had fallen nearly 47 percent since its May public debut.
Cisco posts fastest growth in 15 years on $9 billion AI wave
Across Silicon Valley, Cisco Systems delivered a parallel vote of confidence in data-center plumbing, reporting fiscal first-quarter revenue of $18.52 billion—up 24 percent from a year earlier for its fastest expansion rate in more than 15 years and ahead of the $18.1 billion Street consensus. Net income jumped to $4.6 billion from $2.9 billion a year ago, while adjusted earnings rose 40 percent to $1.40 per share versus $1.33 expected.
Chief executive Chuck Robbins told analysts that Cisco sits in the opening innings of a multiyear networking upgrade supercycle, lifting the company’s fiscal 2027 AI infrastructure revenue target to $9 billion—more than double its fiscal 2026 haul. Current-quarter guidance of $18.0 billion to $18.2 billion in sales and $1.34 to $1.36 in adjusted earnings per share also topped consensus estimates of $17.88 billion and $1.23.
Cisco shares nonetheless slipped roughly 2 percent in premarket action after non-GAAP gross margin narrowed to 65.6 percent from 68.1 percent a year earlier, reflecting pricier memory components and a heavier shipment mix of AI switching hardware. Even so, analysts noted that accelerating orders across Cerebras, Cisco, and CoreWeave’s recent $9 billion customer prepayment surge show enterprise AI capital budgets showing zero signs of slowing heading into 2027.