David Prince
US Equity/Options Fund Manager, Mentor at T3 Live
Cerebras shows the danger of chasing hot IPOs: buyers after its 100% first-day jump became exit liquidity for big sellers, and the stock has now given back nearly all of its post-IPO gains. x.comÂ
Cerebras still needs to come down further before it is worth buying. IPO stocks often rise sharply at first, then fall, and can take a long time to return to their original value, so entering at an expensive price right after the IPO is unappealing. The view is not entirely negative on Cerebras, and it should not be called a direct Nvidia rival. x.comÂ
Cerebras and its customers likely accounted for many of the chip limitations alleged in the short report, so the report may be wrong. This is a suspicion without specific insight. Short interest rose 40.7% into the report to 19.86 million shares, or 8.4% of float. x.com x.comÂ
Cerebras likely needs more time despite heavy bullishness around its earnings and a nice breakout on its recent-IPO chart. Last quarter's earnings disappointed, so a sudden blowout quarter was unlikely. x.comÂ
Cerebras risks falling further if the market takes a breather, because stocks that IPO in a red-hot bull market tend to get bid far above fair value and then drop precipitously, as Arm's IPO showed; Cerebras has already fallen some. Investors upset about missing an allocation should remember this, echoing @ram's point, relayed by @dee_bosa, that every stock gets back to its IPO price. x.comÂ
Cerebras is now worth buying after its shares fell into the previously stated $60-$120 buying range. The earlier concern was an out-of-control valuation and providing liquidity to insiders at much higher prices; the shares shown are about $117. x.comÂ
Cerebras is a poor bet after spiking from its $185 IPO open into the $300s. Some 55-65% of IPOs trade below their offer price after a year, and the jump makes those odds even worse. The valuation was already extremely rich and depends on future growth going well with great execution from management. x.comÂ
Cerebras shares face selling pressure as a sizable unlock hits its tiny float. Per the prospectus, about 28 million Class A shares held by directors, officers and non-employee holders become tradable on the second trading day after Tuesday's earnings, only about three months after listing. With IPOs coming years later, VC and PE backers collect the gains while retail becomes exit liquidity, needing seven years of 70% revenue growth to justify the valuation. x.com x.comÂ
Vicor's efficient delivery of key power modules is part of the case for Cerebras meeting and exceeding its 2028-29 numbers. As models improve, more security breaches and deployments should make Cerebras look increasingly like a cybersecurity play. Its revenue ramp looks constrained by capacity, not yet by demand. Bullish on Cerebras but cautious on the broader market, with no short-term earnings prediction. x.com x.com x.com x.comÂ
Cerebras is difficult for retail investors to understand, and management has not done a great job explaining its business since going public. It deserves more attention as the most direct AI IPO of 2026, but going long Cerebras is hard to justify when Nvidia can be owned instead. x.comÂ