The stock of artificial intelligence (AI) chipmaker Cerebras Systems is poised to begin trading on the Nasdaq (NDAQ) exchange at $400 per share, which is 120% above its initial public offering (IPO) price.
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Trade NVDA with leverageCerebras had priced its IPO at $185 a share, above the expected range due to surging demand for its shares. The company had initially priced its IPO in a range of $115 to $125 a share. Cerebras’ stock is due to start trading on the Nasdaq exchange May 14 under the ticker symbol “CBRS.”
Cerebras makes microchips that run AI workloads. Demand for the IPO has been extremely strong. Consequently, the IPO is expected to raise $5.55 billion in capital for Cerebras, which sold 30 million shares. The IPO price gives Cerebras a market capitalization of $56.4 billion.
Cerebras’ Competitive Edge
Founded in 2016 and based in Silicon Valley, Cerebras is a competitor of chipmakers such as Nvidia (NVDA) and AMD (AMD). Management at Cerebras claim that the company’s Wafer Scale Engine 3 microchip is superior to the graphics processing units (GPUs) made by Nvidia.
The company announced in January this year that it had signed a deal with OpenAI worth $20 billion for 750 megawatts of computing capacity. In 2017, OpenAI considered merging with Cerebras, viewing the chip company as a leader in the pursuit of artificial general intelligence (AGI).
Is NVDA Stock a Buy?
It’s too early for there to be ratings and price targets on Cerebras’ stock. So instead let’s look at Nvidia. NVDA stock has a consensus Strong Buy rating among 42 Wall Street analysts. That rating is based on 40 Buy, one Hold, and one Sell recommendations issued in the past three months. The average NVDA price target of $274.38 implies 24% upside from current levels.
