Cerebras Systems (NASDAQ: CBRS) could see improved confidence around its OpenAI infrastructure ramp following its latest 200MW European data center capacity announcement, UBS analysts wrote, noting the expansion helps reduce execution risk around the company’s cloud and colocation ambitions.
UBS wrote that the additional European capacity provides incremental support for OpenAI’s first tranche deployment, an area where investors had expressed concerns given Cerebras’ position as a relatively new entrant to the cloud and colocation leasing market.
The firm added that the expansion increases confidence in OpenAI’s ramp while providing Cerebras with flexibility to pursue additional business opportunities as the sites come online over the next four to six quarters.
Cerebras announced plans to bring its first European data center capacity online by the end of 2026, with the full 200MW expected to be available by the end of 2027. UBS estimates the new capacity represents a meaningful increase from the company’s previously announced 150MW to 200MW of contracted capacity across projects in the U.S. and Canada.
Including the European expansion and previously disclosed infrastructure commitments, UBS estimates Cerebras now has visibility to approximately 410MW of announced contracted power capacity. Those commitments include Nautilus, Colovore, Digi Power X, WhiteFiber, Scale, and Bell’s 300MW facility announced earlier this year, which UBS assumes is split roughly evenly between Cerebras and CoreWeave.
The analysts wrote that having approximately 400MW of the 500MW required for OpenAI’s first two tranches effectively secured, assuming both are deployed through cloud infrastructure, supports confidence in the deployment timeline. UBS noted that OpenAI retains flexibility to deploy the second tranche through hardware deployments in its own data centers or through cloud partners.
UBS expects the second OpenAI tranche to ramp relatively quickly during the second half of 2027 and wrote that it would not be surprised to see additional agreements with large colocation providers over the coming quarters if deployment continues largely through Cerebras’ cloud platform.
The firm maintained its price target for Cerebras at $320, as shares traded hands up 8% at about $214.
UBS’s valuation is based on an enterprise value-to-sales multiple applied to 2029 estimates and discounted back to 2027. The firm uses an average multiple of around 9 times 2029 estimated EV-to-sales from compute peers and applies it to its $13.6 billion sales estimate, which it wrote could prove conservative as OpenAI and AWS deployments ramp.