Cerebras Stock Surges 6% After Sam Altman Calls Chipmaker 'Close Partner'
Key Points
- Cerebras stock rose 6.3% in premarket trading Monday to $177 per share after Sam Altman's reassurance on Friday.
- The chipmaker had plummeted 20% last week after OpenAI revealed it would use Nvidia GPUs instead of Cerebras chips for GPT-6.1 Sol's Ultrafast mode.
- Cerebras signed a $10 billion deal with OpenAI in January 2025 to supply 750 megawatts of computing power through 2028.
Cerebras, a competitor to Nvidia, designs large computer chips and AI systems engineered to run artificial intelligence models faster than traditional GPUs. The company's flagship product, the Wafer Scale Engine 3, claims superior speed compared to Nvidia's offerings. Despite Monday's gains, the stock remains down by nearly half from its post-IPO peak after the company's Nasdaq debut in May. The company's market capitalization stands at just over $39 billion, a decline from the $95 billion valuation during its May IPO.
The underlying foundation for the partnership remains substantial. In January, Cerebras and OpenAI signed a $10 billion agreement for the chipmaker to supply 750 megawatts of computing power through 2028. Citi analysts noted in a Friday report that their revenue outlook for Cerebras between 2026 and 2028 remains unchanged despite the recent disclosure about Nvidia's role in the GPT-6.1 rollout.
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Citi's analysts suggested the market may be overreacting. "We believe frontier-AI labs' latest models would initially roll out on internal chips before running on third-party or Cerebras cloud, so it's too early to read much into it," they wrote. The analysts indicated that Cerebras' ability to outperform depends on evidence that gross margins stabilize, warning that further delays in reaching peak margins could pressure sentiment given the company's premium valuation.
Corporate partnerships in the AI hardware sector often involve multiple chip suppliers at different stages of model development. Cerebras' $10 billion commitment from OpenAI, combined with Altman's public affirmation of their relationship, suggests the two companies maintain strategic alignment despite the tactical decision to use Nvidia silicon for a specific feature rollout. The distinction between initial model training, internal deployment, and third-party cloud availability creates multiple opportunities for specialized hardware providers to contribute to the AI pipeline.
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Why this matters: Investor confidence in Cerebras now hinges on execution against margin targets rather than exclusive hardware relationships. If the company can stabilize gross margins as Citi expects, the $39 billion market cap could justify its valuation. If margin pressures persist, the stock faces further downside pressure despite maintaining its core OpenAI partnership.
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What This Means
Cerebras faces a critical inflection point where partnership breadth matters less than financial execution. The $10 billion OpenAI deal and Altman's endorsement provide revenue certainty through 2028, but gross margin stability will determine whether institutional investors view the company as a viable Nvidia alternative or a niche specialty player. Quarterly gross margin trends over the next two quarters will likely determine whether the stock stabilizes or tests new lows.
Sources: CNBC and other international news outlets.
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