Cerebras Stock Rebounds 10% Following Sam Altman's Reassurance
OpenAI CEO reaffirms partnership with AI hardware firm after market volatility
Quick Look
Cerebras shares rose 10% Monday after OpenAI CEO Sam Altman publicly confirmed the firm remains a 'close partner.' The rebound follows a 20% drop last week sparked by concerns that OpenAI would prioritize Nvidia chips for its upcoming GPT-6.1 Sol model.
AI-generated summary
Why It Matters
Cerebras went public in May and holds a $10 billion supply deal with OpenAI through 2028. The company competes with Nvidia by producing Wafer Scale Engine chips.
Cerebras stock climbed 10% on Monday, rebounding from last week's decline, after OpenAI's CEO Sam Altman reassured investors that the firm is a "close partner."
The AI hardware firm, which made its debut on the Nasdaq in a monster IPO in May, saw its stock plummet 20% to its lowest price last week after it was revealed that OpenAI would power its "Ultrafast" mode for GPT-6.1 Sol with Nvidia's graphics processing units instead of Cerebras' chips.
"There is some speculation about our partnership with Cerebras," Altman said in a post on X on Friday. "Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed."
The company's stock rose almost 3% in extended trading on Friday following Altman's comments.
Cerebras has seen its market cap plunge since its May debut and is now valued at just over $43 billion, down from $95 billion.
Cerebras, a Nvidia competitor, sells large computer chips and AI systems that are designed to run AI models faster than traditional GPUs. It claimed that its flagship product, the Wafer Scale Engine 3, runs faster than Nvidia's GPU.
Cerebras signed a $10 billion deal with OpenAI in January to supply it with 750 megawatts of computing power through 2028.
Citi analysts said that their view of Cerebras' revenue outlook between 2026 and 2028 remains "unchanged."
"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 said in a note on Friday morning.
"We believe the stock's ability to outperform is increasingly tied to evidence that gross margins are stabilizing. Any further delay in the gross margin trough would likely weigh on sentiment, particularly given Cerebras' premium valuation," they added.
Open Questions
- Will gross margins stabilize as Citi analysts suggest?
- What is the specific role of Cerebras in future OpenAI models?
