Cerebras Systems shares were gaining early Monday after a slump last week. OpenAI CEO Sam Altman has good news about his company's work with the chip maker.
Cerebras shares were up 6.2% at $176.69 in the premarket. The stock has dropped 15% over the past five trading sessions, hit by fears it was losing out to Nvidia when it comes to powering high-speed versions of OpenAI's artificial-intelligence models.
"Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed," Altman posted on social-media platform X late Friday.
That should settle some nerves. OpenAI is Cerebras' biggest customer by revenue backlog. However, semiconductor research firm SemiAnalysis has said OpenAI is using Nvidia chips rather than Cerebras hardware to power 'Ultrafast' mode for its latest GPT6.1 Sol AI model.
Altman's comments suggest that Cerebras is still likely to be involved in powering Ultrafast in the future, possibly when it can ramp up production of its chips.
Barron's previously wrote that Cerebras stock could be risky because of its high valuation and the company's dependence on OpenAI. The stock opened trading at $350 following its IPO in May. But initial enthusiasm about the potential for the company's unusually large AI chips-which excel at running models at high speeds-has faded as earnings failed to impress investors.
Paul Meeks, head of technology research at Freedom Capital Markets, upgraded Cerebras to Buy from Hold on Friday, arguing the selloff had gone too far.
"The key for this stock [Cerebras] is can they add the necessary capacity on time and on budget," he wrote. "We're not cavalier about the OpenAI / Nvidia threat, but we've our eye on the true prize, or prizes, which are 1) timely power capacity additions, and 2) entering the stock only when at least most of the company's execution risk has been squeezed out."
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