By Utkarsh Shetti
May 14 (Reuters) - Chipmaker Cerebras is set to make its U.S. market debut later on Thursday, as it looks to ride a wave of investor euphoria for companies that are at the heart of the artificial intelligence boom.
The firm's IPO is the largest this year and comes as AI-linked stocks push broader markets to record highs despite challenges to global growth stemming from the Middle East conflict.
The Sunnyvale, California-based chipmaker, which is a competitor to industry juggernaut
Nvidia, raised $5.55 billion in an upsized offering, implying a valuation of $56.43 billion on a fully diluted basis.
"If Cerebras trades well, it will reinforce the idea that there's strong demand for high-potential AI names," said Matt Kennedy, a senior strategist at Renaissance Capital, which provides IPO-focused research and ETFs.
Founded in 2015, Cerebras sought to challenge conventional AI computing with its wafer-scale engine, designing chips roughly the size of a dinner plate to speed up processing. Unlike traditional GPU-based systems that rely on clusters of interconnected chips, it packs hundreds of thousands of compute cores onto a single processor.
The listing marks its second attempt to go public, after it dropped its plans to list its stock last year. Its partnership with G42, a UAE-based AI company that provided more than 85% of its revenue in 2024, had drawn a national security review by the Committee on Foreign Investment in the United States.
Since then, Cerebras has secured Amazon and OpenAI, two of the biggest builders of AI infrastructure in the world, as customers.
AI SPENDING SURGES
As the race to develop faster and smarter AI models heats up, tech giants are pouring hundreds of billions of dollars into the ecosystem.
The outsized demand has prompted a gold rush-like frenzy among investors, with AI-linked stocks seeing eye-popping returns in hopes that the revolutionary technology will upend traditional workflows.
The Dow Jones U.S. Semiconductors Index, which tracks chip heavyweights such as Nvidia, Qualcomm, and Intel, has returned more than 107% over the past year, compared with the S&P 500's about 26% rise.
Cerebras raised the size and price range of its IPO earlier this week to manage surging interest in its shares. Sources told Reuters that the offering had drawn orders for more than 20 times the number of shares available.
The offering is expected to be the largest U.S. tech IPO since Arm's $4.87 billion offering in 2023, Kennedy said, adding that the research firm is calling it "the largest AI IPO of all time."
Cerebras is set to start trading on the Nasdaq Global Select Market later on Thursday under the ticker symbol "CBRS."
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Anil D'Silva)
