TLDR
- Paul Meeks at Freedom Capital raised his rating on Cerebras Systems (CBRS) from Hold to Buy, assigning a $209 price target.
- The rating change followed a sharp 17% decline driven by concerns that OpenAI may be shifting toward Nvidia GPUs.
- Meeks characterized the market’s response as overdone, arguing the OpenAI situation represents a minimal risk.
- The stock gained close to 2% following the announcement, bouncing back modestly from recent post-IPO lows.
- Consensus estimates point to Cerebras revenue expanding more than threefold to $2.95 billion by 2027.
Shares of Cerebras Systems (CBRS) advanced nearly 2% Friday following a rating upgrade from Freedom Capital, which lifted the AI chip specialist to Buy from Hold. The shift arrives on the heels of a steep 17% drop tied to speculation about the company’s standing with OpenAI.
Paul Meeks, the firm’s analyst, established a $209 price objective—a figure that sits below the broader Street consensus of $292. Still, the upgrade represents a notable reversal from Freedom Capital, which had maintained a cautious Hold stance since prior to the company’s public debut.
The recent decline was set in motion by news that OpenAI has been deploying Nvidia GPUs to run an accelerated iteration of its GPT architecture. Market participants interpreted this development as evidence that OpenAI might be reducing its reliance on Cerebras technology.
Meeks challenged that interpretation. He described the market’s negative reaction as disproportionate and characterized the potential OpenAI risk as minimal, even assuming the reports are fully accurate.
Analyst Rationale for the Upgrade
Meeks highlighted growing demand in the AI inference segment, noting that supply is expected to trail demand for an extended period. He anticipates that Cerebras will continue securing contracts with strategic partners such as AMD and Amazon Web Services, irrespective of OpenAI’s hardware decisions involving Nvidia.
The investment case centers heavily on the company’s Wafer Scale Engine platform. This technology is designed specifically for AI inference workloads, which Meeks views as a competitive edge as the industry increasingly focuses on deploying models in production environments rather than solely training them.
Meeks also raised the possibility of a hybrid architecture in which GPUs manage the initial prefill phase of a query, while Cerebras processors handle the subsequent decode operations. Such a configuration could preserve Cerebras’ role even within infrastructures dominated by traditional GPUs.
Financial Projections and Current Valuation
Analyst consensus forecasts show Cerebras revenue climbing from roughly $887 million this year to $2.95 billion by 2027—a more than tripling over a two-year span.
Achieving that growth trajectory hinges on operational execution, particularly the company’s ability to scale power infrastructure and manufacturing capacity according to plan and within budget.
At the time of the upgrade, shares were changing hands around $172.50. That level hovers narrowly above the stock’s post-IPO floor of $169, which was reached back in May 2026.
Freedom Capital’s $209 target stands as the most modest price objective currently published on Wall Street. The firm has expressed confidence in the Wafer Scale Engine architecture since before the IPO but refrained from a Buy rating until the stock price offered a more attractive risk-reward balance.
With the recent pullback, the firm now views the valuation as compelling for investors with a longer time horizon who can tolerate near-term volatility stemming from OpenAI-related headlines.
Cerebras shares remain above their lowest post-IPO levels but continue to reflect this week’s downdraft. Going forward, investor sentiment will likely hinge on whether the company’s pipeline of deals with AMD and AWS expands at the pace the Street is projecting.
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