Cerebras Systems Inc. (CBRS) rose 6.3% in premarket trading Monday, rebounding from last week’s selloff after OpenAI CEO Sam Altman took to X to reassure investors about the companies’ alliance.
“Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed,” Altman said in a Friday post, addressing what he described as “some speculation” about the relationship. The stock had already climbed almost 3% in extended trading that day; the gains broadened in Monday’s premarket session.
Even after the bounce, Cerebras remains down nearly half from its post-IPO peak. Its market value is roughly $39 billion, versus about $95 billion at its May debut.
The pullback was triggered last week by news that OpenAI would use Nvidia Corp. graphics chips—rather than Cerebras silicon—to power the “Ultrafast” mode of GPT-6.1 Sol. As a direct Nvidia rival, Cerebras sells wafer-scale AI processors and systems, claiming its flagship Wafer Scale Engine 3 outperforms Nvidia’s GPUs. The company signed a deal with OpenAI in January to supply 750 megawatts of computing power through 2028, so the Nvidia pivot rattled investors over the depth of that partnership.
Beyond the headlines, Cerebras’s financials present a mixed picture. Revenue reached about $510.0 million in fiscal 2025, up 75.7% from roughly $290.3 million a year earlier. Net income was about $237.8 million, a net margin of nearly 46.6%.
Yet the December 2025 balance sheet shows a debt-to-equity ratio of roughly negative 0.5—meaning total liabilities exceeded shareholders’ equity—while the current ratio stood at about 2.1. Free cash flow was a negative $392.8 million, as the company spends heavily to scale its cloud infrastructure, weighing on near-term profits.
The valuation leaves little margin for error. Cerebras trades at about 137.9 times forward earnings and 59.7 times sales. Its customer base spans global data centers, with pay-as-you-go cloud access. Risks include brutal competition and rapid chip obsolescence across AI hardware, the challenge of scaling its unique wafer-scale manufacturing, and global supply-chain and geopolitical exposure.
Wall Street is taking Altman’s intervention in stride. Citi analysts kept their “unchanged” view of Cerebras’s 2026–2028 revenue outlook. “We believe frontier-AI labs’ latest models would initially roll out on internal chips before running on third-party or Cerebras cloud,” they said, “so it’s too early to read much into it.”
But they cautioned that CBRS’s ability to outperform is increasingly tied to evidence that gross margins are stabilizing. “Any further delay in the gross margin trough would likely weigh on sentiment, particularly given Cerebras’ premium valuation,” they wrote.
Altman’s tweet bought the stock a 6% premarket bounce. The harder questions—$392.8 million in negative free cash flow and a 137.9-times forward multiple—remain unresolved.
