Artificial intelligence chipmaker Cerebras soared 90% in its trading debut, setting the bar for its biggest initial public offering so far this year and the latest sign that the AI euphoria is far from over.
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The company was only founded in 2015 and is now worth more than $75 billion.
Cerebras shares began trading on the Nasdaq stock exchange at $350 per share, 90% above the company’s stock price of $185 on Wednesday night. This price hike comes after the company had already raised its IPO price.
Cerebras has ties to many of the hottest companies in artificial intelligence, including Amazon Web Services and OpenAI. But the company is challenging market leader Nvidia, which offers chips that AI companies can’t get enough of. That has pushed investors to push Nvidia’s market value to more than $5.6 trillion as of Thursday.
The company will also face stiff competition from AMD and Intel, both of which are backed by the U.S. government.
The enthusiasm for AI has driven Intel stock higher in recent months, with the company’s stock currently up more than 215% since the beginning of the year. U.S. government holdings also increased by more than 470% to about $50 billion. However, that profit is just a theory until the stock is sold, which is not actually the case.
Investor demand for Cerebras appears to be equally hot. Banks conducting the stock offering have received orders for more than 20 times the number of shares they have available to issue, Bloomberg News reported.
The same enthusiasm has also boosted the stock price of Amazon, which partners with Cerebras. On Thursday, Amazon’s corporate value approached $3 trillion for the first time in history.
The explosion of artificial intelligence is also a major driver of the overall stock market.
The S&P 500 index has risen about 10% over the past three months despite soaring energy prices, the ongoing Iran war, rising inflation and the threat that the Fed could raise interest rates by the end of the year.
But if you subtract gains from Apple, Amazon, Tesla, Meta, Microsoft, Nvidia, and Alphabet (collectively known as the Magnificent 7), the return is only about 5.5%, according to the XMAG ETF.
The Nasdaq Composite Index also rose on Thursday, thanks to the Cerebras IPO and broad AI-driven sentiment.
Nvidia’s stock price rose this week after Chief Executive Officer Jensen Huang accompanied President Donald Trump on a visit to Beijing, China, as the company and investors aim to gain access to the key market.
If Elon Musk’s SpaceX goes public, Cerebras’ IPO would likely be the biggest this year and is widely expected to happen within the next few months. SpaceX, which just merged with Musk’s artificial intelligence company xAI, is expected to be worth more than $2 trillion when its stock debuts on the stock market.
