Cerebras Systems Inc (NASDAQ:CBRS) shares climbed about 23% on Monday after at least nine brokerages initiated coverage of the AI chip designer following the expiry of the quiet period, backing its unconventional wafer-scale architecture weeks after a strong market debut.
IPO bookrunners Morgan Stanley, Citigroup, Barclays and UBS were among the firms to initiate coverage. Mizuho initiated with an Outperform rating and $300 price target, Wedbush with a Buy and $270 target, Barclays with an Overweight and $280 target, and UBS and Rosenblatt both set $300 targets. Morgan Stanley was the most conservative of the group, initiating at Overweight with a $250 target.
UBS analysts caled Cerebras a "fast inference pure play with backlog building." The firm cited the company's Wafer-Scale Engine as the world's largest compute chip, saying it offers a performance advantage over GPUs on a subset of fast inference applications that address a premium segment of the market.
UBS highlighted Cerebras' commercial momentum, pointing to its position as the only current supplier shipping to OpenAI under a pre-payment arrangement and a growing inference collaboration with Amazon Web Services. The bank's $300 target is based on 10x EV/Sales applied to 2029 estimated revenue of $11.2 billion, discounted back 18 months, using hardware peers including Nvidia, AMD, Broadcom and Marvell as valuation comparables.
California-based Cerebras designs wafer-scale engine chips roughly the size of a dinner plate to speed up AI processing, challenging traditional GPU-based systems like those of Nvidia that rely on clusters of interconnected chips.
UBS said Cerebras' WSE design integrates SRAM and compute in a single chip on a 300mm wafer, eliminating traditional interconnect bottlenecks and overcoming what it described as the "memory wall" that constrains GPU and HBM-based systems. The bank said the architecture generates revenue per gigawatt in the $30 to $35 billion range, comparable to Nvidia and above other accelerator peers.
The firm flagged the industry shift toward disaggregated inference architectures as a broadening opportunity for Cerebras, viewing the company's AWS collaboration as that cloud provider's bid to offer a competitive solution to Nvidia's upcoming Vera Rubin platform expected to ramp in the second half of 2026.
Among key risks, UBS cited Nvidia's integration of Groq into its roadmap, Cerebras' hybrid business model, and the need to scale its supply chain nearly tenfold to support the OpenAI program alone -- a constraint that could limit its ability to simultaneously ramp AWS and potentially defer other hyperscale engagements at Microsoft, Oracle Cloud or elsewhere.
Cerebras shares opened at $350 on their May 14 debut, up from the $185 IPO price, before closing up 68% at $311.07. The company raised $5.55 billion in the offering, one of the largest U.S. tech IPOs in recent years.