TLDR
- Freedom Capital raised Cerebras Systems (CBRS) to Buy from Hold, establishing a $209 price target on Friday.
- The rating change follows a sharp 17% decline triggered by news that OpenAI is utilizing Nvidia GPUs for an accelerated GPT model version.
- Paul Meeks, the firm’s analyst, described the market’s response as overdone and characterized OpenAI-related risks as minimal.
- The stock advanced nearly 2% following the announcement, rebounding modestly after approaching its lowest levels since going public.
- Street analysts forecast Cerebras revenue will surge more than threefold to $2.95 billion by 2027.
Shares of Cerebras Systems (CBRS) advanced nearly 2% Friday after Freedom Capital upgraded the artificial intelligence chipmaker to Buy from Hold. The rating shift arrives on the heels of a steep 17% drop linked to concerns surrounding its OpenAI partnership.
Paul Meeks, analyst at Freedom Capital, assigned a $209 price objective to the shares. While that figure trails the consensus Street estimate of $292, it represents a meaningful change in stance from the firm, which maintained a Hold position since before the company’s initial public offering.
The recent decline was set in motion by media reports indicating OpenAI has deployed Nvidia GPUs to support a higher-speed iteration of its GPT technology. Market participants interpreted this development as evidence that OpenAI may be reducing its reliance on Cerebras infrastructure moving forward.
Meeks challenged that interpretation. He characterized the market’s negative reaction as disproportionate and described the potential OpenAI-related headwinds as insignificant, even if the underlying reports prove correct.
Why the Analyst Sees Opportunity
Meeks highlighted growth in the AI inference market, noting that demand is anticipated to exceed available supply for multiple years ahead. He expects Cerebras to continue securing partnerships with major players such as AMD and Amazon Web Services, independent of OpenAI’s chip selection choices.
The investment case centers on Cerebras’ Wafer Scale Engine platform. The technology is designed to execute AI inference workloads with high efficiency, which Meeks views as a competitive edge as the sector transitions from model training to model deployment at scale.
He also raised the possibility of a hybrid architecture where GPUs manage the initial prefill phase of processing requests, while Cerebras hardware handles the subsequent decode operations. This type of distributed workflow could preserve Cerebras’ market position even within GPU-dominated infrastructure environments.
The Numbers Behind the Call
Current analyst consensus points to Cerebras revenue climbing from approximately $887 million in the current year to $2.95 billion by 2027. That represents a more than 230% expansion over a two-year timeframe.
Analysts covering the company emphasize that achieving these projections hinges on operational performance. The key variables include whether Cerebras can successfully scale its power infrastructure and manufacturing capabilities according to planned timelines and financial parameters.
At the time of the upgrade, shares were changing hands at $172.50. That price point sits marginally above the stock’s post-IPO floor of $169, which was established in May 2026.
Freedom Capital’s $209 price objective stands as the most cautious target among Wall Street firms covering the stock. The firm notes it has maintained positive views on the Wafer Scale Engine technology since before the IPO, but deliberately postponed an upgrade while monitoring for improved valuation entry points.
That patience appears to have concluded now that the share price has retracted. The firm positions the current valuation as an attractive opportunity for investors with longer time horizons who can overlook near-term volatility tied to OpenAI-related headlines.
Cerebras stock continues to trade significantly above its post-IPO nadir but still reflects the impact of this week’s sharp pullback. The upcoming catalyst will be whether the company’s contract pipeline with AMD and AWS expands at rates consistent with analyst expectations.
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