Cerebras Seen with Caution over Cloud-Capacity Delays

Dow Jones11-14 01:40

1240 ET - There's some reason for caution following Cerebras's 3Q report, Morgan Stanley analysts say in a note, even as financial results showed strengths. The company has fallen behind on delivering cloud capacity for a major customer, potentially driving small penalties and raising the possibility of a cancellation if the delay is prolonged. "This highlights that the take or pay nature of the contract still depends on delivery execution milestones: continued misses could affect both the timing and amount of contracted revenue," the analysts say. "We remain OW given the upside to our price target, but are more cautious than last quarter and would want to see capacity deliveries catch up and the contracted cloud ramp materialize before becoming more constructive." Cerebras surges 10%.

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