Cerebras Systems stock rating upgraded to buy on valuation by Freedom Capital

Freedom Capital upgraded Cerebras Systems (CBRS) stock rating to Buy on Wednesday, citing a valuation perspective. The company's stock fell 17% in recent days after reports surfaced that OpenAI is using NVIDIA GPUs for the Ultrafast version of its GPT-1 Sol model. Cerebras shares were trading at $171 on Wednesday, close to the $169 level representing the lowest close since the company's May 2026 IPO.

The stock has seen an 18% decline over the past week and stands just 5% above its 52-week low of $160.81. Freedom Capital's price target of $209 is below the Street consensus but higher than the company's high estimate of $330. Analysts project Cerebras revenue to increase 3.3-fold in 2027 to $2.95 billion from $887 million expected for 2026.

The company's Wafer Scale Engine technology is focused on AI inference applications, and partners include AMD and Amazon Web Services. Freedom Capital identified timely power capacity additions and execution risk as key factors for the stock. In June, Cerebras reported revenue of $210 million, a 10% increase from the previous quarter, but posted a loss of $0.05 per share.

The company forecasts September revenue of $215 million, in line with consensus estimates. Cerebras unveiled the CS-4 system following its Supernova event, boasting 6x system-level improvements and 10x throughput per watt enhancements compared to the CS-3. Several analysts have reiterated positive ratings on Cerebras Systems following the product launch, with Mizuho setting a price target of $300 and UBS maintaining a Buy rating at $330.