The chip manufacturer Cerebras is expected to open up about 90% on its IPO in the United States

Cerebras stock jumps 89% on Nasdaq debut

The chip designer raises $5.55 billion in its U.S. market debut

The opening price implies a valuation of $106.75 billion on a fully diluted basis

(Updates to add charts)
by Utkarsh Shetti, Echo Wang, and Max A. Cherney

Chip designer Cerebras Systems’ CBRS.O shares jumped 89% above the offer price at their debut on the Nasdaq, continuing the relentless market enthusiasm for companies seen as major beneficiaries of the artificial intelligence boom.

On Thursday, its stock opened at $350, well above the $185 offer price per share, enabling it to raise $5.55 billion. This surge gives Cerebras a valuation of $106.75 billion on a fully diluted basis.

This Sunnyvale, California-based company’s market debut is the biggest of the year to date and comes as AI-related stocks propel markets to record levels despite challenges to global growth stemming from the conflict in the Middle East.

Founded in 2015, Cerebras sought to challenge conventional AI computing with its silicon wafer-scale engine, designing plate-sized chips to accelerate processing. Unlike traditional systems based on GPUs that rely on interconnected chip clusters, it integrates hundreds of thousands of computing cores on a single processor.

“In Silicon Valley, we understand the scale that AI will reach and what that means,” said Andrew Feldman, CEO of Cerebras, in an interview with Reuters. “We develop AI through training and use it for inference. As these models become smarter, our use of them will explode.”

However, these rapid beginnings could raise questions about Cerebras’ ability to maintain its high valuation in the long term.

“The valuation seemed reasonable at the $185 offer price if you consider 2028 sales (5.8x EV/sales) and EBITDA (12.8x),” said Nicholas Smith, senior research analyst at Renaissance Capital, which provides pre-IPO research and IPO-focused ETFs. “At the current price, this level is quite high, even by 2028 standards.”

AI SPENDING SOARS

As the race to develop faster and smarter AI models intensifies, tech giants are pouring hundreds of billions of dollars into the ecosystem.

This insatiable demand has triggered a gold rush-like frenzy among investors, with AI-related stocks showing dizzying returns in the hope that this revolutionary technology will disrupt traditional workflows.

The Dow Jones U.S. Semiconductors .DJUSSCT index, which tracks heavyweight electronic chip sector players like Nvidia, Qualcomm, and Intel, recorded a gain of over 107% in the past year, compared to an increase of around 26% for the S&P 500 .SPX.

Cerebras revised the size and price range of its IPO earlier in the week to meet the growing demand for its shares. Sources told Reuters that the offering attracted orders for over 20 times the number of available shares.

This listing marks its second IPO attempt, following the withdrawal of a previous filing last year. Its partnership with G42, an AI-based company in the UAE that generated over 85% of its revenue in 2024, underwent a national security review by the Committee on Foreign Investment in the U.S. The committee eventually gave the green light to the operation.

Since then, Cerebras has successfully counted Amazon and OpenAI among its clients, two of the world’s largest AI infrastructure builders.

“AI is generating considerable excitement, and if investors believe the company is poised for significant growth due to the agreement with OpenAI and the partnership with AWS, they are willing to pay the price,” said Smith.