TLDR
- Cerebras (CBRS) stock fell roughly 10% on its second day of trading after surging 68% on its IPO debut Thursday, pricing at $185 and closing at $311.07.
- The company raised $5.55 billion in its IPO, offering 30 million shares at $185 each and opening at $350.
- With $510 million in 2025 revenue, CBRS trades at a trailing price-to-sales ratio of nearly 200x — over 7x Nvidia’s multiple.
- Its $24.6 billion backlog is heavily concentrated, with $20 billion tied to a single cloud deal with OpenAI that includes an exclusivity clause and an exit option for delays.
- Analyst Gil Luria of D.A. Davidson argues the stock is worth roughly $115 per share — about $25 billion — broadly in line with its backlog value.
Cerebras Systems (CBRS) stock fell around 10% Friday, one day after its explosive IPO debut, as investors weighed a sky-high valuation against questions about the company’s technology and customer concentration.
CBRS priced at $185 per share Thursday, opened at $350, and briefly hit $385 before trading was halted. It closed its first day at $311.07 — a 68% gain. By Friday morning, the stock was trading around $279.99.
The IPO raised $5.55 billion, one of the largest AI-related public offerings in recent memory. On a fully diluted basis, the market cap crossed $100 billion.
That’s a lot of weight to carry for a company with $510 million in 2025 revenue.
At current prices, CBRS trades at a trailing price-to-sales ratio of close to 200x. Nvidia, by comparison, trades at roughly 27x. Even accounting for Cerebras’ growth trajectory, that gap is hard to ignore.
The Technology Case
Cerebras builds unusually large AI chips. Its flagship Wafer-Scale Engine 3 (WSE-3) is, by the company’s own account, 58 times larger than a leading GPU chip and delivers inference up to 15 times faster than Nvidia-based solutions.
The speed advantage is real. But analysts point out it comes with trade-offs.
D.A. Davidson analyst Gil Luria noted that the chip’s unusual size has so far limited it to smaller, less complex models. It also creates manufacturing challenges around yield — producing enough working chips at scale hasn’t been confirmed yet for large deployments.
“The system may deliver higher speed for some applications, but it is also less flexible than current deployments of AI compute,” Luria wrote.
CEO Andrew Feldman pushed back, telling Barron’s that Cerebras is already privately hosting larger models and will do so publicly within weeks.
The Backlog Problem
Cerebras reported a $24.6 billion backlog at the end of 2024. The company expects to recognize around $3.7 billion of that as revenue in 2026 and 2027 combined.
But there’s a catch. Around $20 billion of that backlog — more than 80% — comes from a single cloud deal with OpenAI.
That deal includes an exclusivity clause that could limit Cerebras’ ability to sell to other frontier AI labs. It also includes an exit option if there are delays, which could shrink the backlog significantly.
Luria put a rough valuation of around $25 billion on the company — approximately $115 per share — based on the backlog figure.
Cerebras does count some of the biggest names in AI among its customers, including OpenAI, Amazon Web Services, Meta, and IBM.
Revenue grew 96% year-over-year to $171 million in the most recent period. But Nvidia’s data center business pulled in $62.13 billion in its latest quarter, up 75%.
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