The investment case for Cerebras (CBRS) fundamentally rests on two core questions. First, is Andrew Feldman the right leader with the team to deliver and execute on the plan? Second, how much market share can he realistically take from the incumbents and hyperscaler alternatives, specifically folks like NVIDIA, AMD, AWS Trainium, and Google TPU?
The response to that first question is an easy sell. Andrew is exactly the sort of CEO who has the grit to pull complex technical pieces together and drive hard results. Cerebras has traveled a long development road for over 10 years, and their Wafer-Scale Engine (WSE) could well be one of the few true architectural competitors capable of standing up to the legacy players.
For the second question, even if we stay highly conservative and model just a 1% market share capture, the absolute upside is massive. Look at the macro backdrop: NVIDIA just reported a staggering $75 billion in data center revenue alone, which is up 21% quarter-over-quarter and 92% year-over-year. If you take their trailing twelve months (TTM) revenue of $230 billion and apply a 74% growth rate, NVIDIA's next twelve months (NTM) revenue reaches $401 billion. Assuming NVIDIA commands roughly an 80% market share of the broader space, that implies a total NTM market size of approximately $500 billion, a runway that can grow even further into 2027 and 2028.
Assuming Cerebras is able to capture just 1% of that $500 billion market, it yields an implied revenue base of $5 billion. Applying a \~11x Sales-to-Enterprise Value multiple on that revenue—which represents a discount compared to NVIDIA's implied valuation of a $5.5 trillion EV/market cap on its forecast data center revenue, and sits below current sell-side estimates of 14x for NVIDIA and 10x to 15x for AMD and Intel—the implied Enterprise Value for Cerebras comes out to $55 billion. Depending on the exact boundaries of your implied market sizing (ranging from $445 billion to $500 billion), the specific market sizing timeframe, and ultimate market share expectations, the implied share price stretches across a wide range from $200 to more than $600+.