Cerebras Systems Inc. shares plunged to their lowest level since the company’s historic market debut, sliding nearly 20% this week amid intensifying competitive pressure from Nvidia and the expiration of insider lock-up periods.
On Wednesday, research firm SemiAnalysis reported that OpenAI will utilize Nvidia graphics processing units to power the “Ultrafast” inference mode for its GPT-6.1 Sol model, a significant shift away from Cerebras hardware. The announcement came as the broader artificial intelligence sector continues to watch the balance of power between chip manufacturers.
The stock, which closed Friday at $166.43, marks a dramatic reversal for Cerebras. Since its Nasdaq debut in May, where it opened at $350 per share—89% above its initial offering price of $185—the shares have lost more than half their value. At its opening, Cerebras commanded a market capitalization of approximately $95 billion, narrowly missing the $100 billion threshold joined by peers such as Meta, Alibaba, and SpaceX. Its current valuation stands at just over $39 billion.
The loss of the OpenAI inference contract poses a notable challenge to Cerebras’ long-term strategy. In January, the company announced a deal valued at over $10 billion to supply OpenAI with 750 megawatts of computing power through 2028. However, industry analysts project that inference workloads will surpass training as the dominant demand in AI data centers by the end of the decade, according to McKinsey. Securing these high-volume inference contracts has been central to Cerebras’ value proposition as an alternative to Nvidia’s custom ASIC offerings.
Compounding the downward price pressure, the company is facing increased share availability as lock-up restrictions expire. On Wednesday, up to 19.4 million shares became eligible for sale, representing approximately 8% of total outstanding shares, held by directors, officers, and non-executive employees. This follows a schedule where up to 14.6 million shares have unlocked every two weeks since August 19.
Leadership turnover also contributed to market concerns. CEO Andrew Feldman and CTO Sean Lie, both of whom became billionaires following the IPO, have been active sellers as new shares hit the market. The combination of losing a marquee client contract and increased supply of stock from insiders has led investors to reevaluate the company’s near-term trajectory.
Interesting how inference is becoming the main battleground. Cerebras lost its biggest narrative point this week.
Still seems overvalued to me. $350 IPO price was pure hype without steady revenue to back it up.
Nvidia really showed who runs the show here. Losing the OpenAI inference deal hurts Cerebras badly.