Key Takeaways
- Cerebras shares fell 18% in a week as AI stocks sold off on Oracle’s $20 billion raise and again after the midterms.
- Cerebras made no announcement of its own, and CoreWeave and Oracle fell on the same AI worries.
- Analysts expect revenue to more than triple next year, and the stock’s forward sales multiple has fallen far from its June peak.
- The third-quarter report and the IPO lockup’s end come close together, so waiting for the numbers makes more sense.
Cerebras Systems (CBRS) stock is down 18% in the past week without any news of its own. The AI trade sold off twice, taking CoreWeave (CRWV) and Oracle (ORCL), its newest cloud partner, down too.
Oracle’s $20 billion bill landed on its partners
Oracle agreed on Oct. 27 to offer Cerebras’s inference on its cloud. Before Monday’s open, Oracle filed to raise $20 billion in stock and bonds for its AI buildout. AI infrastructure stocks slid, and Oracle fell 11% over the week. UBS cut its target to $250 from $330 that morning but kept a Buy, so the cut doesn’t explain the drop. For now, the deal is more liability than help. It’s too new to show up in revenue, yet the stock already trades on how Oracle funds its data centers.
Thursday’s rout hit every data-center name
On Thursday, chip and AI stocks sank on fears the Democrats’ midterm sweep will tighten AI rules and slow new data centers. The Nasdaq Composite fell 6%, and the Philadelphia chip index 12%. CoreWeave’s growth depends on new data centers just as Cerebras’s does, and it’s down 16% in the past week. It ended June with about $104 billion in revenue backlog. Its next report will show whether that fear reaches customers’ orders.
TIKR tracks 11 analysts on Cerebras Systems. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Cerebras Systems, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Cerebras Systems’ Analyst Ratings
The report and the lockup come first
Analysts expect revenue of $890 million this year, then $2.96 billion in 2027 and $7.54 billion in 2028.
And the stock is far cheaper on them than after its May IPO.
At 13x forward sales as of Thursday, it trades well below its 36x average since listing and June’s 63x peak. Analysts’ average target is still $275, about three times Friday’s close.
Two risks still hang over the stock. Culper Research announced a short on Oct. 28, claiming “$CBRS wafers break down after just ~2 years.” The IPO lockup on early holders’ shares also ends soon. Under Cerebras’s 10-Q, it ends two trading days after the Nov. 12 third-quarter report, or sooner at the 180-day mark. That mark falls early next week, before the report.
I’d wait for the report. Unlocked shares could push the stock lower first, and Cerebras has to show it’s on pace for next year’s $2.96 billion. Of course, if the quarter is strong and Oracle orders start showing up, the stock may not stay this cheap for long.
So what is Cerebras stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
