Cerebras shares skyrocket 89% in debut as AI frenzy sends chipmakers market cap above $100B | Latest Tech News
Shares of chip designer Cerebras Systems soared 89% above the initial public offering price on their Nasdaq debut, extending the market’s unrelenting frenzy for firms seen as the largest beneficiaries of the artificial intelligence increase.
Its shares opened at $350 on Thursday, properly above the IPO price of $185 per share, where it raised $5.55 billion. The leap offers Cerebras a valuation of $106.75 billion on a totally diluted foundation.
The Sunnyvale, Calif.-based firm’s IPO is the biggest so far this yr and comes as AI-linked shares push broader markets to report highs despite challenges to global growth stemming from the Middle East battle.
Cerebras shares opened at $350 on Thursday, properly above the IPO price of $185 per share, where it raised $5.55 billion. REUTERS
Founded in 2015, Cerebras sought to problem standard AI computing with its wafer-scale engine, designing chips roughly the dimensions of a dinner plate to velocity up processing. Unlike conventional GPU-based systems that rely on clusters of interconnected chips, it packs lots of of 1000’s of compute cores onto a single processor.
“In Silicon Valley we understand just how big AI will be, and what that means,” Cerebras CEO Andrew Feldman told GWN in an interview. “We make AI with training, and we use it with inference. As these models get smarter, the amount we use them will explode.”
The stellar debut, however, might raise questions about whether or not Cerebras can continue to command its wealthy valuation over the long run.
Co0founcer and CEO Andrew Feldman, above. Cerebras has secured Amazon and OpenAI, two of the largest builders of AI infrastructure in the world, as clients. REUTERS
“It (valuation) looked reasonable at the $185 IPO price when looking out to 2028 sales (5.8x EV/sales) and EBITDA (12.8x) metrics,” said Nicholas Smith, senior research analyst at Renaissance Capital, which supplies pre-IPO research and IPO-focused ETFs.
“At the current price, it is quite high even out to 2028.”
AI spending surges
As the race to develop sooner and smarter AI fashions heats up, tech giants are pouring lots of of billions of {dollars} into the ecosystem.
The outsized demand has prompted a gold rush-like frenzy among buyers, with AI-linked shares seeing eye-popping returns in hopes that the revolutionary technology will upend conventional workflows.
The Dow Jones US Semiconductors Index, which tracks chip heavyweights such as Nvidia, Qualcomm, and Intel, has returned more than 107% over the past yr, in contrast with the S&P 500’s about 26% rise.
As the race to develop sooner and smarter AI fashions heats up, tech giants are pouring lots of of billions of {dollars} into the ecosystem. REUTERS
Cerebras raised the dimensions and price vary of its IPO earlier this week to handle surging curiosity in its shares. Sources told GWN that the offering had drawn orders for more than 20 instances the quantity of shares accessible.
The itemizing marks its second attempt to go public, after it dropped its plans to listing its stock last yr. Its partnership with G42, a UAE-based AI company that offered more than 85% of its income in 2024, had drawn a national security review by the Committee on Foreign Investment in the United States. The committee finally cleared the deal.
Since then, Cerebras has secured Amazon and OpenAI, two of the largest builders of AI infrastructure in the world, as clients.
“There is significant AI excitement, and if investors believe it is poised for significant growth with the OpenAI deal and AWS partnership, they are willing to pay up for it,” Smith said.
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