Nvidia challenger Cerebras races toward IPO: priced at $115-125, aiming for a valuation of up to $26.6 billion

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Another heavyweight player in the AI chip sector is about to hit the public market. Nvidia’s competitor Cerebras Systems has officially launched its IPO roadshow, marking the largest pure AI chip company IPO in recent times, as well as an important indicator for gauging market enthusiasm for AI infrastructure investment.

On May 4, according to Reuters, sources revealed that Cerebras plans to price its shares within a range of $115 to $125 per share, offering 28 million shares and aiming to raise about $3.5 billion, with a target valuation of up to $26.62 billion. The company plans to list on Nasdaq, with the ticker "CBRS". According to previous Bloomberg reports, Cerebras’ valuation could reach about $40 billion, with the fundraising scale as high as $4 billion.

This is Cerebras’ second attempt at an IPO. Previously, the company withdrew its listing application last October. This relaunch comes amid a continued surge in AI infrastructure investment and a revived IPO market, significantly raising market attention to the offering.

Wafer-scale chip differentiation path, direct competition with Nvidia

Cerebras is headquartered in Sunnyvale, California, and is renowned for its wafer-scale engine chips.

It is reported that this type of chip integrates massive computing power and memory onto a single silicon wafer, paired with dedicated systems and software stack, aiming to greatly accelerate the speed of training and inference of large AI models, and can provide both on-premises and cloud service options to customers.

This technological path puts Cerebras in direct competition with Nvidia and other AI hardware manufacturers.

As AI applications increasingly proliferate, demand for high-performance chips needed to train and run complex models has soared, making semiconductors a key bottleneck in the technology supply chain, positioning chip makers among the biggest beneficiaries of the AI wave.

Revenue surges, turns profit, fundamental support for valuation logic

Financial data shows that Cerebras’ revenue in the fiscal year ended December 31 last year rose from $290.3 million to $510 million, an increase of about 76%. Earnings per share reached $1.38, a sharp turnaround from the previous fiscal year's EPS loss of $9.90.

Rapid revenue growth and improved profitability provide fundamental support for the company's high valuation in this offering and, to some extent, respond to concerns about a valuation bubble in AI concept stocks.

Star capital backing, OpenAI’s big order secures long-term demand

On the capital side, Cerebras earlier this year completed a late-stage $1 billion financing round, led by tech investment giant Tiger Global, putting its post-money valuation at $23 billion.

Well-known institutions including Benchmark, Fidelity Management, Altimeter, AMD, and Coatue also participated.

On the customer side, Cerebras signed a multi-year agreement worth over $20 billion with OpenAI, under which ChatGPT’s parent company will deploy 750 megawatts of Cerebras’ high-speed AI computing power.

This strategic cooperation not only offers the company a highly visible source of long-term revenue but also further solidifies its position in the AI infrastructure sector.

IPO market recovers, AI sector as scarce target

From a market perspective, the IPO market is generally recovering, trading is active, and investors’ concerns about the Middle East situation have eased.

Analysts point out that sectors like AI and finance are less affected by supply chain disruptions and oil price fluctuations, and are expected to stand out in the new wave of IPOs.

Cerebras' IPO is seen as a rare, large-scale pure AI chip company offering, with the market set to assess the real demand from investors for direct participation in AI infrastructure companies.

Morgan Stanley, Citigroup, Barclays, and UBS are the lead underwriters for this offering.

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