This Is What Wall Street Is Saying About Cerebras. Does It Make the Stock a Buy Right Now?

Following Cerebras' (NASDAQ: CBRS) blockbuster IPO last month, many retail investors may be wondering whether now is a good time to buy the stock. Wall Street analysts are already chiming in, with nearly a dozen putting buy ratings on it.

Here's what they're saying, what investors should be aware of before buying Cerebras stock, and why the company is already playing a unique role in the artificial intelligence (AI) infrastructure space.

Image source: Getty Images.

What analysts are saying about Cerebras

According to Yahoo! Finance, 10 analysts have buy ratings on Cerebras' stock right now, with an average price target of about $294; the highest is from Citigroup at $340. For reference, Cerebras' share price is about $241 as of this writing.

Investors should never follow blindly what analysts say about a company, but their insights can be help give you a more well-rounded perspective on a stock.

And in the case of Cerebras, many of them are very bullish. Here are just a few of the things they've said recently about the AI stock:

• Morgan Stanley analyst Joseph Moore: "This is a unique chance to invest in an AI processor company with a first-mover advantage against Nvidia, and offers substantial upside as the category evolves."
• Mizuho analyst Vijay Rakesh: "With the industry focused on inference to deliver Agentic AI solutions, we see Cerebras well-positioned as the industry leader in 'fast inference.'"
• Wedbush analyst Matt Bryson: "Cerebras is the only company to have commercialized wafer-scale AI silicon, and it reaches the public market just as the compute cycle pivots from training to inference."

Why analysts believe Cerebras could be a smart bet

Cerebras is tapping into a unique angle in the AI infrastructure market. Where most chipmakers cut large silicon wafers into dozens or hundreds of individual small chips, Cerebras designs and manufactures single chips that use an entire wafer that's about the size of a dinner plate. These integrated wafer-scale chips can operate far more efficiently than servers that use many chips.

For example, Cerebras says its Wafer Scale Engine (WSE-3) has 250 times more on-chip memory and 2,625 times more memory bandwidth than Nvidia's B200 platform.

It has already secured several significant deals with leading AI companies, including a $10 billion agreement with OpenAI to supply 750 megawatts of computing power. OpenAI has also said it will spend up to $20 billion on Cerebras chips over the next few years, and owns an estimated 11% stake in the company.

Amazon is also one of Cerebras' largest customers and signed a deal earlier this year to use its chips on its AWS platform to speed up chatbots and AI services.

Is it time to buy Cerebras?

Cerebras is a rival to Nvidia, and it offers investors an exciting underdog opportunity that didn't really exist before its IPO. But that doesn't mean Cerebras isn't without its risks.

First, the company isn't profitable on a non-GAAP (generally accepted accounting principles) basis. Cerebras had $510 million in annual sales last year but reported a non-GAAP net loss of nearly $76 million, which was larger than its $23 million loss in 2024. With many big deals already signed and underway, Cerebras could narrow its losses, but it's still unclear when it might reach profitability.

Cerebras' stock is also expensive, trading at a price-to-sales ratio of about 88 right now, compared to the tech sector's average of around 9. If you buy Cerebras right now, you're paying a premium.

All that said, I think there's a case to be made for starting a small position in Cerebras. The company's wafer-scale chips could change how tech companies process large volumes of AI data, and its technology is already attracting major deals from leading AI companies.

Just know that the stock could be volatile, particularly if AI spending slows, and only purchase Cerebras stock if you're comfortable paying a premium for it.

Citigroup is an advertising partner of Motley Fool Money. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.