Cerebras shares climb as Wall Street brokerages back AI chip strategy

Cerebras Systems, a California-based AI chip designer, saw its shares rise 5.5% in premarket trading on Monday after nine Wall Street brokerages initiated coverage with optimistic forecasts. Firms including Morgan Stanley, Citigroup, Barclays, and UBS—all IPO bookrunners—backed the company’s wafer-scale engine chips, which are designed to accelerate AI processing by challenging traditional GPU-based systems like those from Nvidia. Morgan Stanley analysts, led by Joseph Moore, called the stock ‘overweight,’ highlighting Cerebras’ potential as a first-mover in AI processors with substantial upside as demand for low-latency inference grows. Citigroup projected Cerebras’ shares could reach $340 within 12 months, according to LSEG data. The company’s IPO underwriters were permitted to publish research 25 days after its Nasdaq listing, where it debuted at $185 and initially surged 70% above that price. However, shares have since declined 36% due to concerns over the tech rally’s sustainability and expectations of hawkish Federal Reserve monetary policy amid the Middle East conflict. Cerebras’ wafer-scale chips, roughly the size of a dinner plate, aim to outperform traditional GPU clusters by offering faster, more efficient processing for AI workloads. The company’s customer base includes Amazon and OpenAI, with additional backing from SoftBank, which reportedly sought to take Cerebras private before its IPO. The Philadelphia SE Semiconductor Index has climbed 60% this quarter, marking its largest quarterly gain since January 2000, reflecting broader optimism in the semiconductor sector.