The Cerebras IPO and the shape of the semiconductor industry

This week’s Cerebras IPO means a new semiconductor stock is heading to the public market. But who is this plucky young upstart, and why are investors taking note of the semiconductor industry right now?

Read on to find out more about Cerebras, as well as the broader semiconductor industry and semiconductor stocks. 

What is Cerebras?

Cerebras is an AI chip designer, specialising in large wafer-scale processors. The business also claims to offer some of the fastest AI inference and training, which equates to the usage and teaching of AI models 

What does this mean in practice? 

In simple terms, it means Cerebras offers cloud-based AI training and usage models, effectively letting customers rent its computing power instead of purchasing hardware. 

But the semiconductor side of the business, where the company constructs massive chips purpose-built for AI applications, is perhaps the more interesting. Here, the company says its Wafer Scale Engine-3 product is “the largest AI chip ever built”. 

This hefty slab of tech is designed to handle the whole enchilada when it comes to AI computing, where conventional AI systems often rely on large numbers of smaller chips working together. As such, it can reduce the need to split AI workloads across a host of chips.

The strategy has attracted high-profile customers and collaborators, including a partnership with OpenAI and a collaboration to deploy in Amazon’s AWS datacentres.

How is Cerebras performing?

According to the business’s S-1 IPO filing from April, revenue reached $510m in 2025, up by 75% YoY. Hardware and cloud services revenue both grew in the period, climbing by 69% and 94% respectively. 

Gross margins were 39% in 2025, narrowing slightly from 42% the year before. The business is not yet profitable, with a non-GAAP net loss of $75.7m in 2025. 

In addition, Cerebras is still a minnow compared to some of the giants in the space (more on them later). The business has a limited customer base, which could leave it reliant on a few relationships. In addition, the business’s current trajectory is dependent on continued strong demand for AI computing power and speed.

What are the details of the Cerebras IPO?

At the time of writing, Cerebras is set to join the NASDAQ on Thursday 14 May, with the ticker symbol CBRS. 

The stock is currently expected to list 30 million shares at $150-$160 each. At the top end of its range, this would raise $4.8bn and give the company a valuation of around $34bn.

Remember that the price at which a share IPOs is rarely the same as the price at which it will begin trading. This could be higher or lower depending on demand on the first day of trading. 

What is happening in the semiconductor industry?

The broader semiconductor industry is attracting considerable investor attention. But why?

Semiconductor chips power huge swathes of modern life, from consumer tech like smartphones and laptops, through to major data centres, medical devices and defence systems. 

But the artificial intelligence boom is what has really gripped the industry.

Vast amounts of computing power are required to train and run AI models. This means the nuts and bolts, things like processors, memory chips, and networking tech, are in major demand. 

Many of these components fall under the blanket term ‘semiconductors’.

Semiconductors are difficult to design and manufacture, giving the industry high barriers to entry. This means only a limited number of companies are in a position to fulfil customer demand. 

A huge driver behind the industry is the major spending coming from tech hyperscalers, which is driving their capital expenditure higher. For example, Microsoft and Alphabet are both guiding to up to $190bn in FY capex across 2026 as they boost AI hardware investment. 

But some commentators have questioned whether the boom in demand is sustainable, noting that the industry is potentially overexposed to a wavering in appetite for AI expansion. 

Examples of major semiconductor stocks

Cerebras might be popping up as the newest face in the public markets, but there is a wide variety of semiconductor stocks out there. Freetrade has gathered some of the most popular semiconductor stocks below, using the holdings of the VanEck Semiconductor ETF. 

This is not an exhaustive list of semiconductor stocks, nor is it a recommendation to buy or sell any of these investments, and you should always do your own research.

Nvidia is the largest company on the planet by market capitalisation, with a value of over $5trn at the time of writing. Its high-end GPUs and AI accelerators mean the business’s products have a place in data centres and gaming PCs alike.

TSMC functions as a chipmaker for those in need. It makes semiconductors for customers who design them but may not have the capability or scale to construct them in-house.

Broadcom’s focus is more on networking, with the business supplying semiconductors for broadband and wireless connectivity applications. 

Dutch company ASML makes lithography machines used to print tiny circuit patterns onto silicon, enabling customers to create small, state-of-the-art chips.

‍AMD’s product base includes processors, graphics chips, and server CPUs. The business is one of the closest direct competitors to Nvidia.