Cerebras Slides 10% on Day Two of Its $5.55B IPO as Wall Street Rethinks the AI-Chip Premium
After a 68% pop on debut, Cerebras dropped 10% on May 15 as investors weighed an eye-watering valuation, two-customer concentration, and a $20B+ OpenAI bet against Nvidia's grip on AI silicon.
Cerebras Systems shares fell roughly 10% on Friday, May 15, in the first full trading session after the AI-chip company priced the largest U.S. tech IPO since Uber's 2019 debut. The wafer-scale processor maker raised $5.55 billion on May 14 by selling 30 million shares at $185 apiece, then watched its stock open near $350 and close up 68% on day one before reversing on day two as investors second-guessed the valuation.
At the day-one close Cerebras's implied market capitalization sat around $66.95 billion, with intraday prints pushing it as high as $106 billion. The Friday slide trimmed roughly $7 billion of paper wealth but still left CBRS comfortably above its IPO price, closing in the $280–$298 range. Renaissance Capital's Nicholas Smith called the valuation "quite high even out to 2028," while D.A. Davidson's Gil Luria put a fair value near $115 a share based on the company's existing backlog.
Underneath the headline numbers, two concentration risks are doing most of the work in the bear case. First: 86% of 2025 revenue — about $510 million — came from just two UAE-linked customers, a degree of dependence that Nvidia investors have never had to think about. Second: a reported $20-billion-plus, three-year supply deal with OpenAI, with potential minority stake warrants attached, has already been priced into the day-one pop. If OpenAI's Codex and ChatGPT inference demand slips, or if it diversifies more aggressively to AMD and in-house silicon, Cerebras's growth curve flattens fast.
Strategically, the IPO is a referendum on whether AI accelerators are a real duopoly-plus market or a Nvidia-and-also-rans market. Cerebras's pitch is that its WSE-series wafer-scale chips beat Nvidia GPUs on inference throughput and energy per token, particularly for the long-context, multi-step reasoning workloads that frontier labs are now running at scale. CEO Andrew Feldman framed the moment plainly during the roadshow: "In Silicon Valley we understand just how big AI will be."
The two-day swing matters beyond Cerebras's ticker. It's the first major IPO in the post-Anthropic-$900B-valuation era, and a clean test of how much froth public markets are willing to absorb after a quarter in which private AI valuations effectively decoupled from revenue. A 10% Friday selloff isn't a disaster — it's a market quietly reminding everyone that the second-day flow is usually where reality starts to push back.
