Why Cerebras Stock Is Trading Far Below Its IPO Price: OpenAI Chip Doubts, Lockup Selling and an AI Sell-Off

Cerebras Systems (CBRS) was trading near $129.50 premarket on Monday, Oct. 19, according to Benzinga, about 30% below its $185 IPO price and roughly two-thirds below the $386.34 high it set after its May debut. The slide has outrun the broader market. Four things explain most of it: a report that OpenAI's fastest inference tier runs on Nvidia chips, repeated unlocks of insider shares, heavy dependence on a few customers, and a sharp sell-off in AI hardware stocks. Some popular explanations, including capacity limits and short selling, are not backed by the sources we reviewed.

How the slide unfolded

The stock opened near $350 on its May debut, valuing the company near $95 billion after day one. By Oct. 13 its market value was about $34.8 billion, per Benzinga. Prices and moves below come from several outlets and differ slightly by source.

1. The OpenAI report

On Sept. 29, research firm SemiAnalysis said in a post on X that OpenAI's GPT-6.1 Sol Ultrafast tier was running on Nvidia GPUs at a low batch size rather than on Cerebras chips, and questioned whether Cerebras would serve the model in the future. Two days later it revised its view, saying Cerebras was sold out and that OpenAI's Cerebras systems were serving Ultrafast to other customers. OpenAI CEO Sam Altman wrote on Oct. 2 that Cerebras is a close partner with a deep engagement pushing the frontier of speed. His post did not say which chips run the new tier, and the rally faded, as Benzinga noted. Neither company has confirmed a broad switch to Nvidia. The report matters because Cerebras' pitch rests on fast inference, and OpenAI is its most important customer: a multiyear agreement to supply 750 megawatts of computing power worth more than $20 billion. OpenAI also lent Cerebras $1 billion and holds warrants for up to 33.4 million shares.

2. Customer concentration

Cerebras depends on very few customers. G42, based in the United Arab Emirates, accounted for 85% of 2024 sales, and G42 together with affiliate MBZUAI accounted for roughly 86% of 2025 revenue, according to The Next Web's summary of the IPO filings. OpenAI is now the largest contracted customer. Barron's, as cited secondhand, put about $20 billion of a reported $24.6 billion backlog on OpenAI, though another source cites $25.4 billion in remaining performance obligations. With so few customers, any sign that one is shifting work elsewhere moves the stock.

3. Lockups and insider sales

A staggered lockup has released shares steadily. Up to 14.6 million shares were freed every two weeks starting Aug. 19. Tranches of up to 19.4 million shares, about 8% of shares outstanding, followed on Sept. 30 and Oct. 14, and Benzinga said releases were planned through the end of October. The stock fell 8.9% on Sept. 30. Separately, Feldman and Lie sold more than $240 million of Class A stock between Aug. 20 and Sept. 25 under trading plans. Eligibility to sell does not mean shares will be sold, but the added supply weighs on the stock.

4. An AI-hardware sell-off and new competition

On Oct. 12, Microsoft unveiled its Maia 300 chip for inference, and the Philadelphia Semiconductor Index fell 2.7%. Benzinga said the in-house chips of large cloud companies make Cerebras' core inference pitch harder to defend. Reports on Oct. 8 that OpenAI's annualized revenue was about $18 billion below earlier figures also hit AI stocks. On Friday, Oct. 16, AI and semiconductor stocks fell broadly on concerns about AI financing, inflation and higher interest rates, and Cerebras fell steeply with them.

What we could not verify

Several claims that circulate about the stock were not supported by the sources we reviewed. We found no evidence that competitors such as Nvidia or AMD have absorbed Cerebras' excess demand because it cannot ramp production. The only capacity claim we found is SemiAnalysis' Oct. 1 comment that Cerebras was sold out. We also found no verified short interest data or technical analysis showing short sellers targeting the stock. Sources also differ on key figures. Cerebras' low is reported as $146.98, $148.50 and $126.05 at different dates, and the size of the late September drop is reported as 16%, 20% and 23%.

What Wall Street says

Analysts remain constructive. Benzinga reported a consensus rating of Buy with an average price target of $291.64, including a Buy and $300 target from Rosenblatt. Citi said its 2026 to 2028 revenue outlook for Cerebras was unchanged and that it is too early to read much into OpenAI's rollout. Targets far above the current price reflect expectations that the OpenAI contract delivers, not confirmation that it will.