By Jack Pitcher
The market's AI party keeps rolling.
AI chip maker Cerebras Systems priced its initial public offering far above expectations on Thursday, and the shares rose nearly 70% from there on their first day of trading on the Nasdaq. Many investors clamoring to get a piece of the IPO received fewer shares than they wanted or nothing at all, forcing them to buy stock in the open market.
The strong reception comes after investors' enthusiasm for AI companies and the chip hardware that powers them reached a fever pitch over the past six weeks, helping the S&P 500 and Nasdaq rebound quickly from Iran war concerns, and soar to new records, which they notched again on Thursday.
Even the Dow industrials got into the act Thursday, driven by gains in Nvidia and Cisco, the latter of which announced an all-in AI push a day earlier. The blue chip index closed above 50000 for the first time in three months and now stands fewer than 200 points from its all-time high.
Chip stocks in particular have been posting gains that remind many investors of the dot-com bubble a generation ago. The PHLX semiconductor index is now up 70% year-to-date. Memory-chip maker Sandisk leads the S&P 500 with a 482% surge over the same period, and Intel has jumped 214%.
Cerebras seemed to go public at the perfect time, after a spate of blockbuster first-quarter results from chip companies inspired investors to pile into the stocks. The IPO's strong performance is a good omen for some of the larger AI companies considering offerings later.
"It certainly sends a signal to SpaceX, Anthropic and OpenAI that the window is open if they want to go through with this process," said Art Hogan, chief market strategist at B. Riley Wealth Management. "You've got a double whammy where investors are hungry for IPOs after a lack of them, and a desire for all things AI."
Tech stocks fueled the S&P 500's 0.8% climb to its first ever close above 7500 on Thursday. The Dow Jones Industrial Average added about 370 points, or 0.7%, and the Nasdaq composite was 0.9% higher.
Analysts caution that major indexes' return to records has been driven by a narrow set of large, AI-related companies. During April's rebound, just 13 stocks in FTSE Russell's All-World stock index, all of which were related to AI, drove half of the return, the index provider said in a report.
Still, the AI trade keeps accelerating. Retail brokerages have been reporting high trading volume from individuals in AI stocks, and the excitement is also showing up in fund activity.
The Roundhill Memory ETF, a fund launched with little fanfare and no major seed investors last month, has soared to more than $9 billion in assets in just over six weeks. That makes it one of the most successful ETF launches in history, and analysts say individual investors are a major source of the inflows.
Known by ticker DRAM, the fund is highly concentrated in a handful of memory chip stocks, and allows American investors to get exposure to Korean memory stocks that don't trade on an exchange in the U.S.
"DRAM is rapidly emerging as the poster child for the ongoing semiconductor frenzy, especially among retail investors," analysts at data provider Vanda Research wrote this week.
Write to Jack Pitcher at jack.pitcher@wsj.com
(END) Dow Jones Newswires
May 14, 2026 16:45 ET (20:45 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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