Cerebras Systems enters coverage at Watchlist, with shares at $196.13 following the largest semiconductor IPO on record.

The growth is not in question

Second-quarter core revenue rose 103% year over year to $209.9 million, and the inference cloud business nearly quadrupled. First-quarter core revenue had already grown 92%. The company guides to $855-865 million of core revenue for 2026 and holds $8.6 billion of cash and investments, which removes the financing risk that usually decides the fate of a company at this stage. The wafer-scale processor is genuine engineering differentiation rather than a marketing claim, and customers are paying for the inference speed it delivers.

Two sets of books

The company reports GAAP results alongside a “core” presentation and directs attention to the latter. The gap is not cosmetic. Core revenue was $209.9 million against GAAP revenue of $180.1 million. Core gross margin was 41%; GAAP was 14%. Core operating margin was negative 16%; GAAP was negative 265%.

The bottom line tells the same story twice. Adjusted loss per share of $0.04 beat the $0.17 consensus and was reported as a beat. GAAP loss per share was $2.98, which across roughly 237.6 million shares implies a quarterly loss near $708 million, close to four times GAAP revenue. Most of that is listing-related share-based compensation and it will fall. It is still a real transfer of value away from shareholders.

The fact that decides the rating

G42 accounted for about 85% of 2024 revenue. By 2025 that had fallen to roughly 24%, which reads as diversification until the replacement is named: Mohamed bin Zayed University of Artificial Intelligence, also Abu Dhabi-based, at about 62%. Two entities from one national ecosystem therefore made up close to 86% of 2025 revenue. Cerebras also spent an extended period under regulatory review tied to that same relationship before it could list, so its revenue exposure and its regulatory exposure point at the same place.

The multi-year OpenAI agreement, reported at 750MW and more than $20 billion, is the credible answer. It is also, for now, a contract rather than a customer base.

Scenario work puts probability-weighted fair value at $191.50, marginally below the current price, on roughly 44 times forward core revenue. The shares sit 49% below their first-day high and 6% above the $185 IPO price.

Full valuation detail, the risk table and the scorecard are in the complete Cerebras Systems (CBRS) report on our Reports page.