By Adam Levine
On Thursday, the stock of artificial-intelligence chip maker Cerebras will begin trading on the Nasdaq Global Select Market under the ticker symbol "CBRS." The timing couldn't be more dramatic, with semiconductor stocks surging and many at or near all-time highs.
Even after Tuesday's selloff, the iShares Semiconductor ETF is up 75% since the end of March. Cerebras' IPO will be a key test of sentiment for the whole sector.
For now, at least, the IPO is passing the test -- and more. On Wednesday evening, Cerebras announced that shares had been priced at $185, above the projected range the company announced on Monday, and up 54% from the midpoint of the initial range laid out earlier this month.
On Thursday morning before the official start of trading, Nasdaq data indicated that shares could open at $375.
The IPO price puts the listing proceeds at up to $6.4 billion before expenses and gives Cerebras a fully diluted market value of about $55 billion.
Cerebras is in the crowded market of chips that can quickly do the heavy-duty mathematics of AI computing. Nvidia's GPU chips are the industry leader by a wide margin, but competition has sprung up from Advanced Micro Devices, Alphabet, Amazon.com, Microsoft, Meta Platforms and others. Cerebras is up against a lot of big names.
Cerebras has a unique product with a real advantage over the competition in one type of AI workload: Running small models, which it does at speeds unmatched by any other AI chip. The company's chips are massive, nearly a foot long across its diagonal. Cerebras eliminates longstanding bottlenecks between computing and memory by putting both on the same chip.
How this plays out in the marketplace remains unknown. Cerebras' new approach works well for small AI models, but it isn't a good fit for the larger, most sophisticated models that still need Nvidia's high-end servers, or at least something close. OpenAI, for instance, uses Cerebras' cloud to run its small Codex-Spark coding model, and it runs very quickly. But OpenAI's latest version of ChatGPT isn't a good match.
Cerebras sells servers that hold its chips, and also rents them out in the cloud. Though cloud services were just 30% of 2025 sales, it's where the company's business model is headed. It had a backlog of $24.6 billion at the end of last year, and over $20 billion of that was a single cloud deal with OpenAI which commenced in February.
The chip maker expects to recognize about $3.7 billion of the backlog as revenue in 2026 and 2027 combined. In 2025, Cerebras booked $510 million in sales, up 76% from the year before, though the company still had a $146 million operating loss. In March, Cerebras signed a binding term sheet with Amazon Web Services, the oldest and largest cloud provider, to be the first hyperscaler to host Cerebras in its data centers. The details of this deal are fuzzier than the OpenAI contract, and the parties have still not executed a definitive agreement.
If the underwriters choose to take their overallotment of 4.5 million shares, there will be 220 million shares outstanding when Cerebras stock begins trading. About 15% of the stock will be sold at the IPO, all in the form of n Class A shares. The rest of the outstanding stock is 185 million Class B shares held by insiders and the company's private investors. Unlike the Class A shares that get one vote, Class B shares get 20 votes. At the start of trading, class A shareholders will have less than 1% of combined voting power.
Class B shares will be convertible to class A for sale on public markets, and there may be a lot of that coming. Typically, insiders and early investors agree not to sell their shares until about six months after the IPO. But Cerebras class B shareholders have a steady drip of opportunities to exit. By the end of August, 84 million Class B shares could be converted and sold, dwarfing the initial public float. Another 87 million shares are eligible in September and October.
All of this will likely weigh on the stock. My recommendation is to wait to see if there are a flood of class B share sales in the spring and summer. The first big trigger will be on the second trading day following the release of earnings for the quarter ended March 31, which should come soon.
This Week in Barron's Tech
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Write to Adam Levine at adam.levine@barrons.com
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May 14, 2026 10:47 ET (14:47 GMT)
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