Cerebras Systems (CBRS -2.23%) priced its initial public offering (IPO) at $185 a share in May, and the stock closed its first day of trading at $311.07. As I write, shares are roughly $165 — below the IPO price, about 47% under that first close, and near the stock’s lowest close since it went public.
The business, meanwhile, keeps growing. The artificial intelligence (AI) chipmaker expects $880 million to $890 million of core revenue for 2026, up about 74% over last year at the midpoint. Core revenue is the company’s preferred non-GAAP (adjusted) sales number.
Any fast-growing AI chipmaker invites a comparison to Nvidia (NVDA -0.52%). And on revenue alone, Cerebras today is about where Nvidia‘s data center business was nearly a decade ago.
Image source: The Motley Fool.
Nvidia had a profitable business to rely on
In fiscal 2017 (the year ended Jan. 29, 2017), Nvidia’s data center business took in $830 million of revenue, almost two and a half times the $339 million it posted in fiscal 2016. That’s around what Cerebras expects to pull in this year.
In fiscal 2026, that business posted $193.7 billion, a 68% rise from the year before and more than 200 times its fiscal 2017 revenue.
But data center was a side business for Nvidia back then. Gaming took in $4.06 billion of the company’s $6.91 billion in fiscal 2017 revenue, almost five times the data center number. Nvidia was also solidly profitable, with net income climbing 171% that year to $1.67 billion.
Today’s Change
(-0.52%) $-1.20
Current Price
$229.28
Key Data Points
Market Cap
Day’s Range
$229.11 – $233.92
52wk Range
$164.27 – $243.37
Volume
84.6M
Avg Vol
120.8M
Gross Margin
74.67%
Dividend Yield
0.23%
In other words, Nvidia funded its move into AI computing with a profitable business it already had. I think this is the biggest difference between the two companies at this point.
Similar revenue, a different company
Cerebras takes a very different approach to the chip itself. Instead of slicing a silicon wafer into many little chips, it uses the entire wafer as one massive processor, which its IPO prospectus says is 58 times the size of Nvidia’s B200 chip. Keeping that much computing power and memory on a single chip helps Cerebras run AI models unusually fast. And speed is what it sells, increasingly on its own cloud service.
Showing how quickly this pitch is catching on, Cerebras’ core revenue rose 92% year over year in 2026’s first quarter, and 103% in the second. That’s a step up from 76% revenue growth in 2025.
Management’s third-quarter forecast of $214 million to $216 million, however, implies growth slowing to around 58% year over year. Of course, Cerebras beat its own guidance last quarter, so the actual number might be higher. Even so, it would likely take a big upside surprise to get anywhere near the 145% Nvidia’s data center business put up in fiscal 2017.
Unlike Nvidia back then, Cerebras also has no profitable business under its AI bet. It lost money in the second quarter even by its own adjusted measure, with a core operating margin of negative 16% (an improvement from negative 42% a year before).
Plus three customers made up around three-quarters of its second-quarter revenue.
What would Cerebras have to win?
To follow Nvidia’s path, Cerebras would need fast AI answers to become a big market of its own. And it’d need to win much of that market against Nvidia itself. Cerebras’ newest quarterly filing lists Nvidia as “a dominant market leader” among its competitors.
“[T]he demand for fast inference is enormous and Cerebras is scaling to meet it,” CEO Andrew Feldman said in the company’s second-quarter earnings release. (Inference is the work of running a trained AI model to give answers.)
The early results arguably back that up. But Cerebras would also need a far longer customer list and, in time, steady profits. Nvidia had the profits before its data center sales took off.
Today’s Change
(-2.23%) $-3.75
Current Price
$164.17
Key Data Points
Market Cap
Day’s Range
$162.48 – $170.11
52wk Range
$160.81 – $386.34
Volume
7.1M
Avg Vol
7M
Gross Margin
39.00%
The stock, of course, already prices in a big part of that outcome. At roughly $165 per share, Cerebras is worth about $39 billion. That comes to about 44 times this year’s expected core revenue.
For context, Nvidia’s entire market value at the end of 2016 was about $58 billion, for a company that earned $1.67 billion that fiscal year.
Could Cerebras be the next Nvidia? It’s possible. The technology is distinctive, and the growth is impressive. But Cerebras is around an eighth of Nvidia’s fiscal 2017 size by total revenue, still losing money, and already valued at about two-thirds of what all of Nvidia was worth back then.
I’d want to see a broader customer list and a path to consistent profits before paying that price for the stock.
