Cerebras
CBRS
$172.86
-4.21%
Cerebras Systems Inc. is an AI company that designs the world's fastest AI infrastructure for training and inference, building the largest semiconductors and supercomputers optimized for AI workloads. As a disruptive innovator in the semiconductor industry, Cerebras differentiates itself through its wafer-scale chip technology and integrated software stack that simplifies complex AI tasks. The current investor narrative centers on the company's massive $25 billion backlog and strategic partnerships with OpenAI and AWS, which drive strong revenue growth but are tempered by disappointing gross margin guidance and a highly speculative valuation following its May 2026 IPO.…
CBRS
Cerebras
$172.86
Related headlines
Investment Opinion: Should I buy CBRS Today?
Rating: Hold. Cerebras is a speculative growth stock with explosive revenue growth (94.4% YoY) but extreme valuation (131.3x PS) and negative profitability. The analyst consensus is Buy with a 58.2% upside to $291.09, but the stock's 45.83% drawdown and negative operating margin warrant caution. Supporting Evidence: Revenue grew 94.4% YoY to $193.4M, gross margin improved to 44.6%, and the company has a $25B backlog. However, the trailing PS of 131.3x is 1,541% above the industry average of 8x, and the forward PS of 33.1x still implies a 314% premium. The company is unprofitable with a -7.8% operating margin and negative equity. Risks & Conditions: This Hold would upgrade to Buy if the stock pulls back to $160 (52-week low) or if gross margins sustainably exceed 50% and operating margin turns positive. It would downgrade to Sell if revenue growth decelerates below 50% YoY or if the backlog conversion disappoints. Valuation verdict: Overvalued relative to industry peers and history, but the premium may be justified if growth continues at current rates.
Sign up to view all
CBRS 12-Month Price Forecast
Cerebras is a high-growth, high-valuation AI stock with a massive backlog but significant execution risk. The base case of 50% probability assumes continued strong growth and gradual margin improvement, leading to a target around $291. The bull case (25%) requires exceptional execution and margin expansion, while the bear case (25%) reflects competitive or macro headwinds. The neutral stance reflects the balanced risk/reward: the stock could double or halve depending on execution. An upgrade to bullish would require evidence of sustained margin improvement and backlog conversion; a downgrade to bearish would follow revenue growth deceleration or competitive losses.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Cerebras's 12-month outlook, with a consensus price target around $291.09 and implied upside of +68.4% versus the current price.
Average Target
$291.09
0 analysts
Implied Upside
+68.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$209 - $340
Analyst target range
Cerebras is covered by 11 analysts, with a consensus leaning bullish as recent ratings from Rosenblatt, UBS, Wedbush, Morgan Stanley, and Needham all reaffirm Buy or Outperform ratings. The average target price is $291.09, implying a 58.2% upside from the current price of $184.01. The consensus recommendation is not explicitly provided but appears to be a Buy based on the ratings. The target range spans from a low of $209.00 to a high of $340.00, representing a 62.7% spread between the low and high, indicating significant uncertainty. The high target of $340.00 assumes successful execution on the $25 billion backlog and margin expansion, while the low target of $209.00 likely prices in competitive pressures from Nvidia and potential gross margin compression. The recent reaffirmations of Buy ratings suggest analysts remain confident despite the stock's decline, but the wide target range highlights the speculative nature of this AI growth story.
Drowning in data?
Find the real signal!
Bulls vs Bears: CBRS Investment Factors
Cerebras presents a high-risk, high-reward opportunity. The bull case rests on massive revenue growth (94.4% YoY), a $25B backlog, and strong analyst support (58.2% upside to average target). However, the bear case highlights extreme valuation (131.3x PS vs. industry 8x), negative profitability, and a 45.83% drawdown since IPO. The single most important tension is whether Cerebras can convert its backlog into profitable growth and justify its premium valuation, or if competitive pressures and execution risks will lead to further de-rating. Currently, the bearish evidence on valuation and profitability is stronger, but the revenue trajectory and backlog provide a potential catalyst for a turnaround.
Bullish
- Massive $25B Backlog: Cerebras has a $25 billion backlog, indicating strong future demand for its AI infrastructure. This backlog, combined with partnerships with OpenAI and AWS, provides high revenue visibility and supports the 94.4% YoY revenue growth in Q1 2026.
- Accelerating Revenue Growth: Revenue grew 94.4% YoY to $193.4M in Q1 2026, up from $99.5M in Q1 2025. Sequential growth from $171.4M in Q4 2025 shows accelerating momentum, driven by AI training and inference demand.
- Analyst Consensus Bullish: 11 analysts cover CBRS with a consensus Buy rating and an average target of $291.09, implying 58.2% upside from $184.01. Recent reaffirmations from Rosenblatt, UBS, and Morgan Stanley indicate confidence despite the stock's decline.
- Improving Gross Margin: Gross margin improved to 44.6% in Q1 2026 from 41.8% a year ago, reflecting better cost management and scale. This trend, if sustained, could lead to operating profitability as revenue grows.
Bearish
- Extreme Valuation Premium: Trailing PS ratio of 131.3x is 1,541% above the semiconductor industry average of ~8x. Even the forward PS of 33.1x is 314% above the industry, implying aggressive growth expectations that may not materialize.
- Negative Operating Margin: Operating margin was -7.8% in Q1 2026, with high R&D ($75.5M) and SG&A ($25.7M) costs. The company remains unprofitable on a GAAP basis, with a net loss of $14.0M in Q1 2026.
- Negative Shareholders' Equity: Debt-to-equity is -0.45 due to negative shareholders' equity, a red flag indicating accumulated losses exceed equity. This financial structure increases risk if cash burn continues.
- Steep Post-IPO Decline: The stock has declined 19.8% from its first close of $311.07 to $184.01, with a maximum drawdown of 45.83%. This persistent downtrend suggests waning investor confidence and potential further downside.
CBRS Technical Analysis
Cerebras has been in a sustained downtrend since its IPO debut on May 14, 2026, with the stock declining 19.8% from its first close of $311.07 to the current price of $184.01. The stock is trading at 47.6% of its 52-week range (low $160.81, high $386.34), positioning it closer to the lows, which could indicate a value opportunity but also reflects persistent selling pressure. The 1-year price change is not available due to the recent listing, but the stock has already experienced a maximum drawdown of 45.83% from its high. Short-term momentum is decisively bearish, with a 1-month price change of -15.6% and a 3-month change of -40.9% (from $311.07 to $184.01). This sharp decline contrasts with the broader market's positive performance (SPY up 0.6% in 1 month and 6.3% in 3 months), highlighting Cerebras' severe underperformance. The relative strength index (RSI) is not provided, but the persistent decline suggests oversold conditions may be emerging, though no reversal signal is confirmed. The 52-week low of $160.81 serves as critical support; a breakdown below this level would signal further downside risk, while resistance at the 52-week high of $386.34 represents a 110% upside from current levels. Beta is not available, but the stock's high volatility is evident from its 45.83% drawdown and wide price swings, making it a high-risk holding that requires careful position sizing.
Beta
—
—
Max Drawdown
-45.8%
Largest decline past year
52-Week Range
$161-$386
Price range past year
Annual Return
—
Cumulative gain past year
| Period | CBRS Return | S&P 500 |
|---|---|---|
| 1m | -19.1% | +0.3% |
| 3m | — | +4.7% |
| 6m | — | +7.5% |
| 1y | — | +18.4% |
| ytd | — | +9.0% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
CBRS Fundamental Analysis
Cerebras is experiencing rapid revenue growth, with Q1 2026 revenue of $193.4 million representing a 94.4% year-over-year increase from $99.5 million in Q1 2025. This growth is accelerating, as Q4 2025 revenue was $171.4 million and Q3 2025 was $135.7 million, indicating a strong upward trajectory driven by AI infrastructure demand. However, the company remains unprofitable on a GAAP basis, reporting a net loss of $14.0 million in Q1 2026, though this loss is narrowing from a net loss of $23.9 million in Q1 2025. Gross margin improved to 44.6% in Q1 2026 from 41.8% a year ago, but operating margin remains negative at -7.8%, reflecting high R&D expenses of $75.5 million and SG&A costs of $25.7 million. The company's balance sheet shows a current ratio of 2.15, indicating adequate short-term liquidity, but debt-to-equity is negative at -0.45 due to negative shareholders' equity, which is a red flag. Free cash flow was negative $119.6 million in Q1 2026, though trailing twelve-month free cash flow is positive at $145.1 million, suggesting recent improvement. The company ended Q1 2026 with $2.75 billion in cash after a significant financing event, providing a cushion for ongoing investments.
Quarterly Revenue
$193406000.0B
2026-03
Revenue YoY Growth
+94.3%
YoY Comparison
Gross Margin
44.6%
Latest Quarter
Free Cash Flow
$145070500.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Open an Account, get $2 TSLA now!
Valuation Analysis: Is CBRS Overvalued?
Given that Cerebras has negative net income (net loss of $14.0 million in Q1 2026), the price-to-sales (PS) ratio is the most appropriate valuation metric. The trailing PS ratio is 131.3x, while the forward PS ratio (based on estimated revenue of $7.18 billion) is approximately 33.1x, implying the market expects massive revenue growth to justify the current valuation. Compared to the semiconductor industry average PS ratio of roughly 8x, Cerebras trades at a 1,541% premium on a trailing basis, reflecting extreme growth expectations. However, the forward PS of 33.1x still represents a 314% premium to the industry, indicating that even aggressive revenue estimates do not fully justify the valuation. Historically, Cerebras' PS ratio has ranged from 101x to 925x over the past two years, and the current 131x is near the lower end of that range, suggesting the stock has de-rated from its post-IPO euphoria. This could imply that the market is pricing in more realistic expectations, but the valuation remains stretched relative to fundamentals.
PE
758.7x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
848.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Cerebras faces significant financial risks from its negative operating margin (-7.8%) and net loss ($14.0M in Q1 2026). The company's negative shareholders' equity (debt-to-equity -0.45) indicates accumulated losses exceed equity, increasing financial fragility. While cash of $2.75B provides a buffer, free cash flow was negative $119.6M in Q1 2026, though TTM FCF is positive at $145.1M. The company's reliance on continued revenue growth to justify its valuation (131.3x PS) means any slowdown could trigger severe multiple compression. Market & Competitive Risks: The stock trades at a 1,541% premium to the semiconductor industry on a trailing PS basis, making it vulnerable to valuation compression if growth disappoints. Competition from Nvidia, which has a more established ecosystem and a 22x forward P/E, poses a significant threat. The stock's 45.83% drawdown and -15.6% 1-month return versus SPY's +0.6% highlight extreme volatility and market correlation risk. Recent news about OpenAI's potential IPO and Nvidia's valuation dip could shift investor sentiment away from speculative AI names. Worst-Case Scenario: If Cerebras fails to execute on its backlog, faces margin compression, or loses key partnerships, the stock could fall to its 52-week low of $160.81, representing a 12.6% decline from $184.01. In a more severe scenario, if revenue growth decelerates below 50% or gross margins drop below 40%, the stock could test $100, a 45.7% loss from current levels, based on historical drawdown patterns.
FAQ
The key risks are: 1) Valuation risk: The stock trades at 131.3x trailing sales, making it vulnerable to sharp declines if growth slows. 2) Profitability risk: The company has negative operating margins (-7.8%) and net losses ($14M in Q1 2026), with no clear timeline to profitability. 3) Competitive risk: Nvidia dominates the AI chip market and could introduce competing wafer-scale technology, eroding Cerebras' differentiation. 4) Execution risk: The $25B backlog must be converted into revenue, and any delays or cancellations would severely impact the stock. The most severe risk is a combination of revenue deceleration and margin compression, which could drive the stock to $160 or lower.
The 12-month forecast is mixed, with three scenarios: Bull case (25% probability) targets $290-$340, driven by strong backlog conversion and margin expansion. Base case (50% probability) targets $209-$290, assuming continued growth but moderate margins. Bear case (25% probability) targets $160-$209, reflecting competitive or macro headwinds. The most likely scenario is the base case, with the stock reaching the analyst average target of $291.09, implying 58.2% upside. However, the wide target range ($209-$340) highlights significant uncertainty. Key assumptions include revenue growth of 70-80% YoY and gross margins around 45%.
CBRS is significantly overvalued relative to its industry. The trailing PS ratio of 131.3x is 1,541% above the semiconductor industry average of 8x. Even the forward PS of 33.1x, based on estimated revenue of $7.18B, is 314% above the industry. Historically, the stock's PS has ranged from 101x to 925x, and the current 131x is near the lower end, suggesting some de-rating has occurred. The market is pricing in aggressive growth expectations, and any disappointment could lead to severe multiple compression. The valuation implies that investors expect Cerebras to capture a significant share of the AI chip market, which is a high bar given Nvidia's dominance.
CBRS is a high-risk, high-reward stock suitable for aggressive investors. The analyst consensus is Buy with a 58.2% upside to $291.09, but the stock trades at 131.3x trailing sales, far above the industry average of 8x. The biggest downside risk is that revenue growth decelerates or margins disappoint, leading to further multiple compression. For long-term investors willing to tolerate volatility, it could be a good buy if they believe in the wafer-scale technology and backlog conversion. However, for risk-averse investors, the extreme valuation and negative profitability make it a sell. A more prudent entry point would be near the 52-week low of $160.81.
CBRS is more suitable for long-term investment given its speculative nature and high volatility. The stock has a beta that is likely above 2 (implied by 45.83% drawdown), making it unsuitable for short-term trading unless one has a high risk tolerance. The company is in a high-growth phase with a $25B backlog, but it may take 3-5 years to achieve profitability. Long-term investors should have a minimum holding period of 3 years to allow the backlog to convert and margins to improve. Short-term traders may find opportunities around earnings reports, but the stock's 19.8% decline since IPO suggests momentum is currently bearish. The lack of a dividend and negative free cash flow (though TTM FCF is positive) further support a long-term growth investment thesis.
