This New AI Stock Is Down 35% Since IPO – But Analysts See 70% Upside Potential For Nvidia Challenger

Multiple brokerages initiated coverage on the stock with a bullish view, citing Cerebras’ first-mover advantage in the fast inference market.

• Citi initiated coverage with a ‘buy’ rating and a $340 price target, according to The Fly.
• The brokerage expects Cerebras to capture 40% - 50% of the total fast inference market share, estimated at $130 billion.
• Morgan Stanley expects existing contracts to support roughly $6 billion in revenue by 2028, with potential for even bigger growth.

Shares of Cerebras Systems (CBRS), which have slumped around 35% since its market debut last month, are drawing growing support from Wall Street, with analysts seeing more than 70% potential upside from current levels as the company looks to capitalize on the expanding AI infrastructure market.

CBRS stock was trading over 5% higher in pre-market trading on Monday.

Wall Street Bullish On First Mover Advantage

The stock was hit with a slew of bullish brokerage actions on Monday. Citi initiated coverage with a ‘buy’ rating and a $340 price target, according to The Fly. This implies a potential upside of 70% from the stock’s closing price of $201 on Friday. The firm believes Cerebras has a first-mover advantage in the fast-inference market and should capture 40%-50% of the total market share, estimated at $130 billion.

Morgan Stanley began coverage with an ‘Overweight’ rating and a price target of $250. Analyst Joseph Moore said demand for low-latency AI inference solutions is rising, and Cerebras is well-positioned with its wafer-scale technology. The brokerage added that the company’s existing contracts support a path to about $6 billion in revenue by 2028, with potential for even bigger growth.

CBRS Seen As NVDA Challenger

Cerebras Systems, which is seen as a competition for Nvidia (NVDA), develops wafer-scale AI chips designed to train and run AI models faster than traditional GPUs. The company already has agreements with Amazon and OpenAI

Last week at the Bloomberg Tech conference in San Francisco, Cerebras CEO Andrew Feldman said the company is working with multiple data center suppliers, though not with Nvidia.

Retail Remains Mixed On CBRS

Retail sentiment on Stocktwits has remained bearish over the past 24 hours. However, CBRS was among the top trending tickers at the time of writing.

One called the stock’s valuation “cheap.”

However, another user pointed to the stock’s high price-to-earnings ratio. The stock has a PE of 181.91, compared to NVDA’s 31.41, according to Stocktwits data.

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