Cerebras: A New Star in the AI Stock Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 42 minutes ago
0mins
Should l Buy NVDA?
Source: Fool
- Optimistic IPO Outlook: Cerebras is set to go public this week with an expected share price range of $150 to $160, up from the previous $115 to $125, potentially valuing the company at over $48 billion, reflecting strong investor confidence in its growth prospects.
- Significant Technological Edge: Cerebras offers a chip that is 58 times larger than Nvidia's B200, achieving inference speeds up to 15 times faster than leading GPUs, which has led to a $20 billion compute deal with OpenAI and a partnership with Amazon Web Services, solidifying its market position.
- Historical Market Performance: While historical data indicates that IPO companies from 2021 to 2024 had negative average returns in their first year, many tech IPOs have shown strong performance shortly after launch, suggesting that Cerebras may see a quick rise post-IPO, but investors should be cautious of potential price corrections.
- Investment Strategy Advice: Given historical trends, investors may not need to rush into buying Cerebras stock immediately after its IPO, as these hot stocks often present better buying opportunities after price dips, thus it's advisable to focus on its long-term value and market performance.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 219.440
Low
200.00
Averages
264.97
High
352.00
Current: 219.440
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Nvidia's Q1 Revenue Expected to Exceed Estimates by $1.4B
- Revenue Surge Expected: According to Citi, Nvidia's Q1 FY2027 revenue is projected to reach $80B, exceeding the consensus estimate of $78.6B by $1.4B, driven by a robust ramp of the B300 product line.
- Continued Growth Trend: The company anticipates an 11% quarter-over-quarter sales increase in Q2 FY2027, reaching $89B, primarily due to the ongoing ramp of B300 and faster-than-expected shipments of 1.6 trillion transceivers, solidifying its market position.
- Strong GPU Demand: Nvidia has only missed consensus estimates by more than $1B three times in the past 12 quarters, with CEO Jensen Huang describing the demand for their GPUs as “insane,” highlighting the company's strong appeal in high-performance computing.
- Sales Forecast Revision: Citi has raised Nvidia's FY2027 sales forecast to $284B, reflecting a 79% year-over-year increase, with AI GPUs expected to account for 70% to 80% of total data center sales, showcasing the company's strategic advantage in AI and data processing.
See More
Nvidia's Dominance in AI Market Continues to Strengthen
- Market Share Advantage: Nvidia holds a 92% share of the GPU data center market, and with global AI infrastructure spending projected to reach $7 trillion by 2030, this will further solidify its market leadership and drive sustained growth for the company.
- Future Revenue Expectations: Nvidia anticipates first-quarter revenue of $78 billion for fiscal Q4 2026, with total revenue expected to reach $922 billion over the next seven quarters, indicating strong growth potential and market confidence.
- Stock Price Forecast: Should Nvidia achieve $621 billion in revenue by 2027, its stock price could surge by 252% to $640, resulting in a market cap of approximately $15.5 trillion, reflecting optimistic market expectations for its future performance.
- Accelerated Innovation Cycle: By shortening its GPU update cycle to 12-18 months compared to competitors' 3-5 years, Nvidia's rapid innovation capability will help maintain its lead in the AI sector, further boosting investor confidence.
See More
Short Seller Andrew Left on Trial for Market Manipulation
- Market Manipulation Charges: U.S. prosecutors accuse short seller Andrew Left of manipulating the market by spreading misleading information that caused retail investors to panic, resulting in a $20 million profit across multiple companies, highlighting his influence and the potential legal risks involved.
- Defense Perspective: Left's attorney argues that he genuinely believed in his stock calls, citing his 2018 recommendation to buy Nvidia based on its AI potential, which illustrates the complex role short sellers play in the market.
- Legal Challenges: Facing up to 25 years in prison if convicted, prosecutors plan to use evidence from social media and private messages to demonstrate Left's intent to manipulate the market, emphasizing the legal risks and ethical controversies surrounding short selling.
- Market Reactions: While short sellers are seen as crucial in exposing wrongdoing, critics accuse them of employing “short and distort” tactics that may unfairly harm public companies, reflecting the divided opinions on the role of short selling in the market.
See More
Cerebras: A New Star in the AI Stock Surge
- Optimistic IPO Outlook: Cerebras is set to go public this week with an expected share price range of $150 to $160, up from the previous $115 to $125, potentially valuing the company at over $48 billion, reflecting strong investor confidence in its growth prospects.
- Significant Technological Edge: Cerebras offers a chip that is 58 times larger than Nvidia's B200, achieving inference speeds up to 15 times faster than leading GPUs, which has led to a $20 billion compute deal with OpenAI and a partnership with Amazon Web Services, solidifying its market position.
- Historical Market Performance: While historical data indicates that IPO companies from 2021 to 2024 had negative average returns in their first year, many tech IPOs have shown strong performance shortly after launch, suggesting that Cerebras may see a quick rise post-IPO, but investors should be cautious of potential price corrections.
- Investment Strategy Advice: Given historical trends, investors may not need to rush into buying Cerebras stock immediately after its IPO, as these hot stocks often present better buying opportunities after price dips, thus it's advisable to focus on its long-term value and market performance.
See More
Direxion Semiconductor ETF Plummets 20.9% Amid Market Rotation
- Leveraged ETF Risks Exposed: The Direxion Daily Semiconductor Bull 3X ETF fell as much as 20.9% today, reflecting investor concerns over high valuations in the chip sector and highlighting the vulnerability of leveraged funds during market volatility.
- Major Holdings Decline: All top ten holdings of the ETF experienced declines, with Micron Technology down 6% and Qualcomm down 15%, while Nvidia only fell 0.5%, indicating varying performances among companies amid economic uncertainty.
- Economic Data Impacting Investor Sentiment: Weak economic data has led to decreased expectations for low-cost loans, putting pressure on businesses reliant on financing and investors seeking higher returns, further exacerbating market volatility.
- Long-Term Underperformance: Despite the Direxion ETF failing to achieve double the returns of the non-leveraged iShares Semiconductor ETF over the past five years, its high expense ratios and hidden costs pose significant survival challenges in the long run.
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Amazon's AI Chip Business Poised for Growth
- Market Leadership: Amazon has established itself as a leader across e-commerce, cloud computing, streaming, and digital advertising, with CEO Andy Jassy indicating that the AI chip business is emerging as a new growth engine, showcasing significant market potential.
- In-House Chip Advantages: Amazon's Trainium2 chip offers 30% better price performance than comparable GPUs, helping the company reduce reliance on external suppliers like Nvidia, thereby enhancing margins and addressing supply chain constraints.
- Strong Booking Demand: Both Trainium2 and Trainium3 chips are nearly fully booked, and despite Trainium4 not yet being available, it is already accepting reservations, indicating robust market demand for Amazon's custom chips.
- Future Growth Potential: Amazon anticipates that within two years, it could start selling AI chips to external customers, with Jassy estimating this business could reach a $50 billion annual run rate, further strengthening the company's financial performance and market competitiveness.
See More
Nvidia's Q1 Revenue Expected to Exceed Estimates by $1.4B
- Revenue Surge Expected: According to Citi, Nvidia's Q1 FY2027 revenue is projected to reach $80B, exceeding the consensus estimate of $78.6B by $1.4B, driven by a robust ramp of the B300 product line.
- Continued Growth Trend: The company anticipates an 11% quarter-over-quarter sales increase in Q2 FY2027, reaching $89B, primarily due to the ongoing ramp of B300 and faster-than-expected shipments of 1.6 trillion transceivers, solidifying its market position.
- Strong GPU Demand: Nvidia has only missed consensus estimates by more than $1B three times in the past 12 quarters, with CEO Jensen Huang describing the demand for their GPUs as “insane,” highlighting the company's strong appeal in high-performance computing.
- Sales Forecast Revision: Citi has raised Nvidia's FY2027 sales forecast to $284B, reflecting a 79% year-over-year increase, with AI GPUs expected to account for 70% to 80% of total data center sales, showcasing the company's strategic advantage in AI and data processing.
See More
Nvidia's Dominance in AI Market Continues to Strengthen
- Market Share Advantage: Nvidia holds a 92% share of the GPU data center market, and with global AI infrastructure spending projected to reach $7 trillion by 2030, this will further solidify its market leadership and drive sustained growth for the company.
- Future Revenue Expectations: Nvidia anticipates first-quarter revenue of $78 billion for fiscal Q4 2026, with total revenue expected to reach $922 billion over the next seven quarters, indicating strong growth potential and market confidence.
- Stock Price Forecast: Should Nvidia achieve $621 billion in revenue by 2027, its stock price could surge by 252% to $640, resulting in a market cap of approximately $15.5 trillion, reflecting optimistic market expectations for its future performance.
- Accelerated Innovation Cycle: By shortening its GPU update cycle to 12-18 months compared to competitors' 3-5 years, Nvidia's rapid innovation capability will help maintain its lead in the AI sector, further boosting investor confidence.
See More
Short Seller Andrew Left on Trial for Market Manipulation
- Market Manipulation Charges: U.S. prosecutors accuse short seller Andrew Left of manipulating the market by spreading misleading information that caused retail investors to panic, resulting in a $20 million profit across multiple companies, highlighting his influence and the potential legal risks involved.
- Defense Perspective: Left's attorney argues that he genuinely believed in his stock calls, citing his 2018 recommendation to buy Nvidia based on its AI potential, which illustrates the complex role short sellers play in the market.
- Legal Challenges: Facing up to 25 years in prison if convicted, prosecutors plan to use evidence from social media and private messages to demonstrate Left's intent to manipulate the market, emphasizing the legal risks and ethical controversies surrounding short selling.
- Market Reactions: While short sellers are seen as crucial in exposing wrongdoing, critics accuse them of employing “short and distort” tactics that may unfairly harm public companies, reflecting the divided opinions on the role of short selling in the market.
See More
Cerebras: A New Star in the AI Stock Surge
- Optimistic IPO Outlook: Cerebras is set to go public this week with an expected share price range of $150 to $160, up from the previous $115 to $125, potentially valuing the company at over $48 billion, reflecting strong investor confidence in its growth prospects.
- Significant Technological Edge: Cerebras offers a chip that is 58 times larger than Nvidia's B200, achieving inference speeds up to 15 times faster than leading GPUs, which has led to a $20 billion compute deal with OpenAI and a partnership with Amazon Web Services, solidifying its market position.
- Historical Market Performance: While historical data indicates that IPO companies from 2021 to 2024 had negative average returns in their first year, many tech IPOs have shown strong performance shortly after launch, suggesting that Cerebras may see a quick rise post-IPO, but investors should be cautious of potential price corrections.
- Investment Strategy Advice: Given historical trends, investors may not need to rush into buying Cerebras stock immediately after its IPO, as these hot stocks often present better buying opportunities after price dips, thus it's advisable to focus on its long-term value and market performance.
See More
Direxion Semiconductor ETF Plummets 20.9% Amid Market Rotation
- Leveraged ETF Risks Exposed: The Direxion Daily Semiconductor Bull 3X ETF fell as much as 20.9% today, reflecting investor concerns over high valuations in the chip sector and highlighting the vulnerability of leveraged funds during market volatility.
- Major Holdings Decline: All top ten holdings of the ETF experienced declines, with Micron Technology down 6% and Qualcomm down 15%, while Nvidia only fell 0.5%, indicating varying performances among companies amid economic uncertainty.
- Economic Data Impacting Investor Sentiment: Weak economic data has led to decreased expectations for low-cost loans, putting pressure on businesses reliant on financing and investors seeking higher returns, further exacerbating market volatility.
- Long-Term Underperformance: Despite the Direxion ETF failing to achieve double the returns of the non-leveraged iShares Semiconductor ETF over the past five years, its high expense ratios and hidden costs pose significant survival challenges in the long run.
See More
Amazon's AI Chip Business Poised for Growth
- Market Leadership: Amazon has established itself as a leader across e-commerce, cloud computing, streaming, and digital advertising, with CEO Andy Jassy indicating that the AI chip business is emerging as a new growth engine, showcasing significant market potential.
- In-House Chip Advantages: Amazon's Trainium2 chip offers 30% better price performance than comparable GPUs, helping the company reduce reliance on external suppliers like Nvidia, thereby enhancing margins and addressing supply chain constraints.
- Strong Booking Demand: Both Trainium2 and Trainium3 chips are nearly fully booked, and despite Trainium4 not yet being available, it is already accepting reservations, indicating robust market demand for Amazon's custom chips.
- Future Growth Potential: Amazon anticipates that within two years, it could start selling AI chips to external customers, with Jassy estimating this business could reach a $50 billion annual run rate, further strengthening the company's financial performance and market competitiveness.
See More
