Shares of chipmaker Cerebras jumped 6%: OpenAI CEO Altman voiced his support for the company
Photo: Michael Vi / Shutterstock.com
Shares of Nvidia’s competitor—Cerebras, a manufacturer of AI chips—rose 6% in premarket trading on Monday, October 5, recouping some of last week’s losses. The rally began after OpenAI CEO Sam Altman publicly voiced his support for the company, but then slowed slightly, according to CNBC.
“There are various rumors circulating about our partnership with Cerebras,” Altman wrote on the social media platform X. “Cerebras is a close partner of ours, and we are working closely together to push the boundaries of what’s possible in terms of [AI model] speed.”
The chipmaker’s stock has already shown sensitivity to the terms of its agreement with OpenAI: following the release of the company’s latest quarterly report—its first since going public—the stock price plummeted 17%, despite a doubling of revenue and a smaller-than-expected loss. Investors were concerned at the time about how scaling up the $20 billion service contract with OpenAI would affect profit margins.
Why Altman Had to Explain Himself
Last week, the chipmaker’s stock plummeted 20%—to an all-time low. The decline began after SemiAnalysis, a research firm specializing in the semiconductor industry, reported on X that OpenAI’s upcoming GPT-6.1 Sol model would run in Ultrafast mode on Nvidia GPUs. Cerebras competes directly with Nvidia by producing large-format chips and AI systems designed to process queries faster than traditional GPUs. The company positions its flagship product, the Wafer Scale Engine 3, as faster than Nvidia’s solutions.
As a result of the slump, Cerebras' market capitalization now stands at just over $39 billion—nearly half of the peak levels reached after its initial public offering in May.
What Analysts Are Saying
On October 2, Citi analysts noted that their outlook for Cerebras’ revenue growth for 2026–2028 remains unchanged. “We believe that the latest models from labs working on cutting-edge technologies will initially be built on in-house chips before transitioning to third-party or Cerebras cloud solutions, so it is too early to draw far-reaching conclusions,” the note cited by CNBC states. Citi also believes that the stock’s ability to outperform increasingly depends on confirmation that gross margins are stabilizing: “Any further delay in reaching the bottom in terms of margins is likely to put pressure on investor sentiment, especially given Cerebras’ premium valuation.”
Wall Street is largely recommending buying the company's stock: 11 out of 13 analysts covering the stock are bullish. There are no sell recommendations.
This article was AI-translated and verified by a human editor
