Artificial intelligence chipmaker Cerebras surged 90% in its trading debut, setting the bar for the biggest initial public stock offering of the year so far, and the latest sign that AI euphoria is far from over.
The company, founded only in 2015, is now worth more than $75 billion.
Cerebras shares began trading on the Nasdaq stock exchange at $350 per share, 90% higher than $185, which is what the company priced its shares at Wednesday night. The price surge also comes after the company already upped its initial public offering.
Cerebras has ties to many of the highest-flying names in artificial intelligence, such as Amazon Web Services and OpenAI. But the company is challenging market leader Nvidia, whose chips AI firms can’t get enough of. That’s caused investors to push Nvidia to a more than $5.6 trillion market value, as of Thursday.
The company will also be facing tough competition from AMD and Intel, the later of which the U.S. government has a stake in.
AI enthusiasm has caused Intel shares to rally in recent months and the company’s shares are now up more than 215% for the year. The U.S. government’s stake has also increased in value by more than 470%, to about $50 billion. However, that gain is only on paper until the shares are sold, which they have not been.
Investor demand for Cerebras looks to be just as hot. Banks running the stock offering received orders for more than 20 times the number of shares available, Bloomberg News reported.
That same craze has also driven up shares of Amazon, which works with Cerebras. On Thursday, Amazon neared a $3 trillion value for the first time.
The explosion in AI has also been a primary driver in the overall stock market.
Despite surging energy prices, the ongoing Iran war, rising inflation and the threat that the Federal Reserve could raise rates before the end of the year, the S&P 500 has jumped almost 10% over the last three months.
But strip out the benefit of Apple, Amazon, Tesla, Meta, Microsoft, Nvidia and Alphabet — collectively known as the “magnificent 7” — that gain is only about 5.5%, according to the “XMAG” ETF.
The Nasdaq composite index was also higher Thursday, thanks to the Cerebras IPO and broader AI-driven sentiment.
Shares of Nvidia have also risen this week after CEO Jensen Huang accompanied President Donald Trump on a trip to Beijing, where the company and investors hope to break into that critical market.
Cerebras’ IPO will likely be surpassed as the year’s largest when Elon Musk’s SpaceX goes public, which is widely expected to happen in the next two to three months. SpaceX, which just merged with xAI, Musk’s AI company, is set to be worth more than $2 trillion when its shares make their stock market debut.
