With demand for AI chips soaring, California-based AI chipmaker Cerebras Systems has filed paperwork with the Securities and Exchange Commission (SEC) in preparation for an initial public offering.
Cerebras is a competitor to companies such as Nvidia, and given the massive demand among investors for chipmaker stocks, the company appears primed to start issuing shares in the near future, having applied to list on the Nasdaq under the ticker symbol CBRS. No listing date has been announced yet, but a source familiar with the plans said the company is aiming for later this month.
An IPO from Cerebras could also help kick-start a still-sluggish market for U.S. listings, which have seen a significant slowdown following a flurry of activity during and after the pandemic a few years ago.
Is Cerebras profitable?
Potential investors may want to take note that Cerebras is still operating in the red. According to its S-1 filing, the company saw a net loss of nearly $67 million during the first half of 2024, with roughly $136 million in sales. It also saw net losses of $127.2 million and $177.7 million during 2023 and 2022, respectively.
The numbers do appear to be trending in the right direction, however, as the filing notes that the losses from the first half of 2024 represent a year-over-year “reduction of 14%.”
As for what the IPO could ultimately net the company, Renaissance Capital estimates that a Cerebras IPO could generate $800 million.
AI-focused companies are lining up to go public
Overall, the IPO market has been slow, though data from EY shows that the recently concluded third quarter of 2024 did see an uptick over the second quarter.
Globally, there were 310 IPOs during the third quarter this year, netting nearly $25 billion in proceeds. For comparison, during the third quarter of 2022, there were 371 IPOs, with more than $52 billion in proceeds.
EY, in a brief, also notes that AI enthusiasm is shining through in the IPO data. “Approximately 50 AI companies are currently in IPO registration; about one-third are profitable. This trend reflects sustained investor interest in AI-driven innovations, despite challenges around profitability,” it reads.
Further, a recent interest rate cut by the Fed—and the prospect of more cuts ahead—could also help fuel more IPO activity. But there are still a lot of factors at play that could keep investors on the sidelines for now, says Mark Schwartz, EY Americas IPO and SPAC advisory leader.
“Despite largely favorable market conditions following a mid-summer dip in confidence of sorts, issuers are approaching the rest of this year cautiously in light of the election and geopolitical concerns,” Schwartz said in a statement to Fast Company. “But, as we get clarity on the political scene and the interest rate environment, there is growing conviction that a stronger IPO market will emerge next year.”