Cerebras faces its November unlock down 72% with a $25.4 billion backlog resting mostly on OpenAI

Cerebras Systems▼−9.34% — Cerebras Systems, down 9.34 percent today (Nasdaq: CBRS), which fuses compute and memory onto a single silicon wafer into one chip roughly 50 times the size of a GPU ³, priced the biggest AI IPO of the year at $185 a share on May 14↗, raised $5.55 billion and closed its first day at $311.07 ¹.

The stock later peaked at $386.34; on October 30 it closed at $109.18, roughly 72% below that high and back under its offer price ¹. The next two events are already dated: the staggered 180-day lockup releases its final tranches around November 9 and 10, and third-quarter results land after the close on November 12 ¹³.

Insiders sold before the door opened

Chief Technology Officer Sean Lie sold more than 710,000 shares for about $147.6 million on August 20 under a pre-set 10b5-1 trading plan, with further sales through October ¹. When a lockup tranche expired on September 30, roughly 19.4 million shares became sellable and two officers filed notices covering $84.3 million of stock↗: Chief Operating Officer Dhiraj Mallick and finance chief Robert Komin Jr. ²

Another 19.4 million shares turned eligible the day the short seller struck ⁴. A Form 144 records an intent to sell; only a later Form 4 confirms an executed sale, and those filings will show what actually changed hands ².

The quarter underneath the slide

Second-quarter revenue rose 74% to $180.1 million, but gross profit fell 20% to $25.6 million, stock compensation hit $377 million and the net loss reached $450.5 million ¹. Capital spending ran to $416.9 million in the quarter and $548.9 million across the first half, mostly cloud systems ⁵³. Gross margin, up from 11.7% in fiscal 2022 to 42.3% in fiscal 2024, slipped to 39.0% in fiscal 2025 ⁶.

Two camps and no verdict

Culper Research, a short seller that disclosed its position on October 28, claims the wafer-scale processors fail after 18 to 30 months in service, run continuous dummy operations to keep from cooling, and use a connector material developed in the 1980s ⁴⁷. Its sharpest point comes from Cerebras's own paperwork: draft IPO filings through December 2025 gave the systems useful lives of 1.5 to 3 years↗; four months later the range was 3 to 5 years, with no explanation ⁶. Longer lives mean lower depreciation and fatter margins ⁶.

Three law firms, Levi & Korsinsky, Bronstein Gewirtz & Grossman and Johnson Fistel, have announced securities investigations; none is a finding ⁷. Chief Executive Andrew Feldman's answer so far is millions of production hours↗, cited on August 12 ⁷. The other side is buying.

ARK Invest, the fund group run by Cathie Wood, bought 45,729 shares after the report surfaced ⁸. Eleven analysts carry a consensus strong-buy rating with an average target near $283 ¹. An Oracle Cloud channel lifted the stock 10%↗; it goes live in 2027 with no disclosed contract value, on a shelf shared with Nvidia▲+1.44% — Nvidia, up 1.44 percent today, Google's TPU AI chips and SambaNovaPVT$11B — SambaNova, private, latest valuation $11B ⁹.

What settles it on November 12

The bull case is $25.4 billion of contracted but unrecognized revenue, and most of it is one contract: a December 2025 master agreement↗ under which OpenAI committed to buy 750 megawatts of inference capacity, worth more than $20 billion ¹. About 22% of the backlog is expected to be recognized in the first 24 months from June 30 ¹.

Whoever catches November's unlocked shares is underwriting that promise. The November 12 print tests it against guidance of $214 to $216 million in third-quarter core revenue ², while the forecast of core gross margin above 60% for 2027 rests on the very depreciation assumption Culper attacked ⁷.