Cerebras Systems (NASDAQ:CBRS) entered the capital markets with a huge splash last week, and the ripples continue to spread. The company generated enormous interest in its IPO, sending the share price up, up, and away.
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The GPU market is going gangbusters, with hyperscaler capex seemingly hitting warp speed. As further evidence, many are expecting the uncontested GPU champion – Nvidia Corporation – to deliver another stunning quarterly report when it shares its fiscal Q1 2027 figures later today.
Enter Cerebras into the equation, and investors were clearly anxious to jump on board the newest publicly-traded member of the AI stampede. Now that the dust is settling, top investor Geoffrey Seiler wonders if it’s time to “go big or go home” when it comes to Cerebras. Needless to say, he’s coming down on the conservative side of the ledger.
“The valuation is sky high, and Cerebras still has to prove it’s more than a niche player,” states the 5-star investor, who is among the top 2% of stock pros covered by TipRanks.
Looking at the cold, hard figures, Seiler paints a fairly uncertain picture regarding the future movement of CBRS’s share price. For instance, using the $311.07 where Cerebras ended its first day of trading, the investor calculates that the company would have had a market cap of some $68 billion. Just a few days later, he notes that this figure had fallen to $60 billion, demonstrating the volatility that has greeted the nascent public company.
Looking at the company’s 2025 revenues of $510 million (76% year-over-year growth) further cloud the picture. Assuming that the company is able to match this revenue trajectory and reach $900 million in the current year, Seiler comes up with a forward price-to-sales ratio in the high sixties.
The investor does acknowledge the potential for big gains, however, especially given that the company has $20 billion in commitments over the next three years from OpenAI. That could signify rapidly growing revenues could be in store in the years ahead.
Still, he’s not quite ready to pull the trigger just yet.
“For a company that was valued at $23 billion in the private markets in February, when it raised $1 billion, I would not chase the stock here,” concludes Seiler. (To watch Seiler’s track record, click here)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.