Cerebras IPO Sparks Speculation Fears as SpaceX Debut Looms Over AI-Charged Market

Cerebras Systems closed its first day of trading on Wall Street with a market cap just below $100 billion on Thursday, joining a short list of companies to reach that threshold on debut day — and immediately reigniting concerns about speculative excess in a market already stretched by an AI-driven rally.

The Silicon Valley chipmaker, which makes application-specific integrated circuits, or ASICs, saw its stock fall 10% on Friday, its first full day of trading, after an initial surge of 68% on the Nasdaq.

Cerebras CEO and Co-Founder Andrew Feldman told CNBC on Thursday that the company's WSE-3 chip — roughly the size of a dinner plate — is 57 times larger than the largest GPU and contains 50 times the number of transistors. The chip is fabricated at Taiwan Semiconductor Manufacturing Company on a 5-nanometer process node.

Founded in Silicon Valley in 2016, Cerebras first filed to go public in 2024 but withdrew that submission after facing scrutiny over its heavy reliance on a single customer: Microsoft-backed AI firm G42, based in the United Arab Emirates. The successful IPO on Thursday minted two billionaires — co-founders and hardware technology executives Feldman and Sean Lie, based on their holdings.

Cerebras and OpenAI announced a $20 billion cloud deal in January that runs through 2028, and Amazon Web Services announced in March that it is using Cerebras chips in its data centers. Still, demand is outpacing supply. "For our fast inference product, there's so much demand that our biggest challenge is actually trying to supply it. We are adding as much manufacturing and data center capacity as we possibly can, and we're still sold out into 2027," CFO Bob Komin told CNBC Thursday.

The debut drew immediate attention from "Mad Money" host Jim Cramer, who warned Friday that the IPO frenzy surrounding Cerebras could be a preview of what happens when SpaceX goes public — potentially in June, with its prospectus expected as soon as next week.

Media reports suggest the SpaceX offering could value the company — whose businesses include Starlink satellite internet, social-media platform X, and the Grok AI chatbot — at between $1.75 trillion and $2 trillion.

Cramer warned the valuation could climb far higher depending on how underwriters structure the deal. "If SpaceX issues just a sliver of stock...this company could have a $5 trillion valuation," he said. "SpaceX would create a bubble unto its own."

He cautioned that a wave of large-scale technology IPOs — potentially including OpenAI and Anthropic, both of which are weighing public offerings — could weigh on the broader market as investors liquidate existing positions to fund purchases of new issues. "The stock market, like any other market, is all about supply and demand. Too much supply and the market breaks down," he said.

Cramer urged underwriters to avoid engineering first-day price explosions of the kind seen during the dot-com era. "Hope the underwriters act responsibly rather than engineering the pops of a lifetime," he said. "They did the latter during the dotcom era and that ended horribly."

The warnings come as the S&P 500 has rallied roughly 19% from its March low, topping 7,500 for the first time this week, driven largely by chip stocks. The iShares Semiconductor ETF has climbed 70% this year. Meanwhile, the 30-year Treasury yield topped 5.1% on Friday for the first time in nearly a year, and consumer sentiment has fallen to all-time lows — a divergence analysts say is increasingly difficult to ignore.

Cerebras' debut is also seen as opening a path for other ASIC-focused startups. South Korean chipmaker Rebellions raised $400 million from investors including Samsung at a valuation of $2.34 billion in March as it prepares its own IPO. SambaNova, which counts Hugging Face and Meta among its customers, received a $350 million funding round in February that included participation from Intel.

With Nvidia's earnings set to report next week into a market near record highs, and a raft of major retailers including Walmart and Target also reporting, investors face a week that will test how much of the AI rally can hold against mounting macroeconomic headwinds.

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