Cerebras Systems (CBRS) continued its upward momentum Tuesday, with shares trading 3.66% higher in premarket action at $246.53, following an 18.32% surge on Monday. The rally comes as Wall Street analysts began covering the newly public AI-chip maker, signaling strong investor interest in hardware alternatives to Nvidia.
The flurry of analyst reports followed the expiration of the IPO quiet period, which had restricted research from banks involved in the offering. At least nine brokerages, including Morgan Stanley, Citigroup, Barclays, and UBS, initiated coverage with positive outlooks. Morgan Stanley analyst Joseph Moore highlighted strong demand for "fast, low-latency inference," the process where AI models generate responses after training.
Cerebras made its Nasdaq debut on May 14 under the ticker CBRS, pricing 34.5 million Class A shares at $185 each. Underwriters exercised their full option, bringing total proceeds to approximately $6.38 billion before fees. The stock has experienced significant volatility since its first trade, opening at $350, reaching an intraday high of $386, closing at $311, then sliding to $201 before this week's rebound.
Unlike traditional GPU vendors, Cerebras employs a wafer-scale engine approach. Its WSE-3 chip is 58 times larger than a top GPU, enabling inference speeds up to 15 times faster than leading GPU-based systems, though the company cautions these figures vary by workload, setup, and model. This architectural difference positions Cerebras as a potential disruptor in the AI hardware market, which has been dominated by Nvidia.
A key driver of bullish sentiment is Cerebras's multi-year agreement with OpenAI, announced in January. The deal involves deploying 750 megawatts of wafer-scale hardware starting in 2026. Sachin Katti, head of compute infrastructure at OpenAI, described Cerebras as a "dedicated low-latency inference solution" for the platform. Additionally, in March, AWS partnered with Cerebras to integrate its Trainium chips with Cerebras CS-3 systems via Amazon Bedrock, with AWS's David Brown calling speed a "critical bottleneck" for complex AI tasks.
Despite the positive outlook, risks remain. Barron's noted that Cerebras's $24.6 billion backlog for 2025 is heavily concentrated on the OpenAI deal, raising concerns about dependency. Any shift in OpenAI's ordering patterns, deployment delays, or intensified competition from Nvidia and AMD could erode the scarcity premium that currently supports CBRS shares. Investors are also watching for execution risks as the company scales its wafer-scale technology.
Cerebras is viewed by Wall Street as one of the purest plays on rapid AI inference among publicly listed companies. This narrative is driving strong interest, but the stock's volatility underscores the speculative nature of the AI hardware market. As the first major AI chip IPO to test public market demand beyond Nvidia, Cerebras's performance could set the tone for future offerings in the sector.
