Is Cerebras Stock a Smart Addition to Your Portfolio in 2024?

Startup Cerebras System's new AI supercomputer Andromeda is seen at a data center in Santa Clara, California, U.S. October 2022.  Rebecca Lewington/Cerebras Systems/Handout via REUTERS

Investors tracking Cerebras Systems are keen to know: is this AI heavyweight’s stock within reach, and what does its IPO mean for your portfolio? This article dives into the status of Cerebras stock, its path to potentially going public, and the insights you need to weigh its investment potential.

Key Takeaways

  • Cerebras Systems is a prominent player in the AI and high-performance computing sectors with industry awards and strategic alliances like the AI Platform Alliance and the Trillion Parameter Consortium bolstering its market position.

  • Cerebras Systems has attracted significant investment over multiple funding rounds totaling $770 million, with a valuation growing from $62.5 million in 2016 to $4.25 billion by 2021, indicating strong investor confidence and potential growth prospects.

  • The company’s innovative Wafer Scale Engine and CS-3 chip offer a competitive advantage in the AI market, while pre-IPO shares are available for accredited investors through secondary market platforms, with wider accessibility expected post-IPO.

Exploring Cerebras Systems’ Market Position

Illustration of a futuristic AI infrastructure with prominent market position

Cerebras Systems has carved a niche for itself in the AI and high-performance computing sectors. Its groundbreaking contributions, as evidenced by the multiple awards it has received, underscore its preeminent market position. The company’s CS-2 system, for instance, bagged a Best of Show award, reflecting Cerebras’ ability to pioneer superfast and innovative AI computing solutions.

Furthermore, Cerebras Systems is not just a silent player. It is actively shaping the future of AI infrastructure and large-scale AI models by engaging in the AI Platform Alliance and the Trillion Parameter Consortium. These strategic alliances further reinforce its significant role within the AI landscape.

The Journey to Cerebras Systems’ IPO

Cerebras Systems’ journey to its Initial Public Offering (IPO) has been fueled by six robust funding rounds, amassing a significant total of $715 million. The most recent round of funding, Series F, took place in November 2021.

This journey towards an IPO, expected in the latter half of the year, is a testament to the company’s growth and its shareholders’ confidence in the Abu Dhabi Growth Fund.

Understanding the Funding Rounds

Cerebras Systems has a rich history of funding rounds, each contributing to its growth and development. Starting with Series A on May 5, 2016, the company has navigated through Series B, C, and D, with each round attracting more investment and raising the company’s valuation.

The funding journey didn’t stop there. Cerebras Systems raised a substantial $273M during its Series E round in 2019, culminating in the largest round of $300M in October 2021. This brought the total funding to a staggering $750 million, signifying the immense faith investors place in the company. Notably, Alpha Wave Ventures has been a key player in this journey, providing robust backing from the venture capital community.

Funding RoundDateAmount
Series AMay 2016$27 million
Series BDecember 2016
Series CJanuary 2017
Series DNovember 2018$88 million
Series E
Series FNovember 2021$250 million
Total Funding$720 million

Notable Investors Behind Cerebras

The Cerebras Systems growth story is backed by several high-profile investors, including Eclipse Ventures. Renowned venture capital firms such as Benchmark Capital and Foundation Capital, known for their strategic technology investments, stand firmly behind the company.

This strong support from the venture capital community, including Altimeter Capital, is a powerful indicator of the company’s potential and the belief in its future success in the San Diego market.

The Potential of Cerebras Stock for Investors

The Potential of Cerebras Stock for Investors

Investing in Cerebras Systems comes with substantial potential rewards, which might lead some investors to consider the decision to buy Cerebras stock. The company’s innovative wafer-scale integration technology gives them a competitive edge, especially in sectors that require high levels of computational power like government labs and large research institutions. This uniqueness in advancing AI hardware, compared to competitors like SambaNova Systems, may align differently with various investor interests and priorities.

Decoding Cerebras Systems’ Valuation

Cerebras Systems’ valuation has seen a meteoric rise, from $62.5 million in May 2016 to a staggering $4.25 billion by November 2021. This significant growth across funding stages underscores the increasing recognition of the company’s potential.

Looking forward, Cerebras Systems may seek to surpass this impressive valuation at its IPO, reflecting its confidence in continued growth and market potential.

YearValuation
2016$62.5 million (Series A)
2017
2018$88 million (Series D)
2019
2021Over $4 billion (Series F) 

Is Cerebras Stock Right for Your Portfolio?

The potential of Cerebras Systems as an investment is influenced by numerous factors. Market demand for its high-performance computing and AI technologies, and the scalability of these technologies, are critical considerations.

The company’s suitability for long-term investment strategies can be assessed by considering the following factors:

  • Adaptability to evolving industry needs

  • Establishment of key strategic partnerships

  • Financial health

  • Capacity to efficiently scale large language models

These factors play a pivotal role in Cerebras Systems’ long-term growth prospects.

How to Acquire Pre-IPO Shares of Cerebras Systems

As a private company, Cerebras Systems’ shares are not publicly traded and have limited availability for general investors. However, interested investors can acquire pre-IPO shares through secondary market platforms that facilitate the sale of private stock.

For Accredited Investors

For purchasing pre-IPO shares of Cerebras Systems, one must qualify as an accredited investor. These accredited investors can register on platforms like Forge for opportunities to buy pre-IPO shares of promising companies such as Cerebras Systems.

Taking advantage of platforms like Forge, accredited investors can receive guidance from Private Market Specialists. These professionals provide valuable insights and navigate the complexities of purchasing pre-IPO shares, making the process more manageable and transparent.

Opportunities Post-IPO

The investment landscape will expand following Cerebras Systems’ IPO. At this stage, its stock will be accessible for purchase to a wider investor base via various online brokerage platforms.

Cerebras Systems: A Leader in High Performance Computing

Cerebras Systems: A Leader in High Performance Computing

Cerebras Systems has revolutionized AI processing solutions with the development of the Wafer Scale Engine – the largest computer chip in the world – and the CS-3. The CS-3 integrates an entire high-performance computing cluster into a single chip with a staggering 900,000 cores. This innovative technology doesn’t just boast size; it also includes:

  • A massive on-chip fabric that facilitates fast connectivity among its cores

  • Complex simulations

  • An impressive lead in performance, such as a 130-fold improvement over Nvidia’s GPUs for critical simulations.

Beyond technology, Cerebras Systems is also expanding its global presence. Its partnership with G42 and its efforts to deploy the powerful CS-2 system worldwide hint at significant growth potential in the international market. This potential was recognized when the company’s expertise in high-performance computing earned them the ACM Gordon Bell Special Prize for their research on COVID-19 in 2022.

What You Need to Know About Cerebras Stock Symbol and Trading

As Cerebras Systems is not publicly traded yet, it does not have an official stock ticker symbol. This means that Cerebras Systems stock is not yet available on the public trading platforms commonly used by retail investors.

Cerebras Systems Financial Insights

Cerebras Systems’ financial performance provides a fascinating narrative. Here are some key points:

  • The company’s valuation on the secondary market saw a decline from a high of $1.9 billion in May to $960 million in August.

  • However, it made a partial recovery to $1.1 billion by October.

  • Following a robust Series F funding round in 2021, the company’s valuation skyrocketed to over $4 billion.

Investors interested in Cerebras Systems can sell their shares through Forge’s secondary marketplace before the company goes public. While the price of Cerebras Systems shares post-IPO is currently speculative, it will be informed by data from comparable public companies.

Future Projections for Cerebras Systems

The future of Cerebras Systems looks promising, buoyed by the growth potential of the artificial intelligence market. For instance, the artificial intelligence computer server market is projected to grow at a 26.54% compound annual growth rate from 2024 to 2029, providing a positive market opportunity for Cerebras Systems.

Cerebras Systems’ strategic collaborations with entities such as KAUST, NETL, and TotalEnergies have led to breakthroughs and enhanced computational approaches. These collaborations indicate the practical impact and advancements Cerebras is making in AI technology usage. Moreover, market analysts predict a shift from AI model training to inferencing and a growing demand for AI within industries, which Cerebras Systems could address with their technology and product development strategies.

Navigating the Investment Landscape with Cerebras Systems

Investing in Cerebras Systems and similar AI companies requires strategic thinking. Investors can set up a Charitable Remainder Trust, use an exchange fund, or take a loan against their equity to manage post-IPO investments in Cerebras Systems. For long-term value, investors should target AI companies like Cerebras Systems that are already generating revenue and have a strategic edge, rather than those with unproven AI roadmaps.

Access to large datasets is critical as it provides AI companies with the raw material needed for model training and development. Infrastructure-related sectors, including semiconductors, cloud computing, and data center equipment, currently offer promising AI investment opportunities. The strong interest from venture capitalists in AI startups signals a growing market and suggests potential future investment possibilities.

Summary

In conclusion, Cerebras Systems represents a unique convergence of innovative technology, strategic positioning, and robust financial performance. Their novel approach to AI processing solutions, their recognized market position, and the fact that their shares are currently available on the secondary market at a significant discount indicate a compelling investment opportunity. Whether you’re an accredited investor looking to buy pre-IPO shares or a general investor waiting for the IPO, Cerebras Systems presents an attractive option in the AI investment landscape.

Frequently Asked Questions

What is Cerebras Systems known for?

Cerebras Systems is known for its innovative AI processing solutions, particularly the development of the world’s largest computer chip, the Wafer Scale Engine, and the CS-3, which integrates an entire high-performance computing cluster into a single chip.

When is Cerebras Systems’ IPO expected?

Cerebras Systems’ IPO is expected in the second half of this year at the earliest.

How can I buy pre-IPO shares of Cerebras Systems?

To buy pre-IPO shares of Cerebras Systems, accredited investors can use secondary market platforms like Forge to facilitate the purchase of private stock.

What is the market opportunity for Cerebras Systems?

Cerebras Systems has a significant market opportunity as the artificial intelligence computer server market is expected to grow at a 26.54% compound annual growth rate from 2024 to 2029. This indicates a positive outlook for the company.

Who are the notable investors in Cerebras Systems?

Notable investors in Cerebras Systems include high-profile venture capital firms such as Benchmark and Foundation Capital.

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