Nvidia has made many investors wealthy through its strong performance, especially in AI stocks which have surged recently due to exciting advancements in technology.
If you’re interested in Nvidia but want to diversify, consider Cerebras, a newer company possibly going public soon.
Could Cerebras be the next big AI stock?
Cerebras is a tech firm that might compete with Nvidia. It boasts the world’s largest chip, the Wafer-Scale Engine, which is 57 times larger than current top GPUs and ideal for AI training.
The company’s growth has been impressive, generating $136.4 million in revenue in the first half of 2024, surpassing its total for all of 2023.
It comes with some notable risks
Despite its rapid growth, Cerebras is not yet profitable, posting an operating loss of $41.8 million in the first two quarters of the year. Additionally, 87% of its revenue comes from one customer, Group 42 Holding, which poses a risk to its financial stability.
Should you invest in Cerebras when it hits the market?
Cerebras may go public later this year and could present a good early investment opportunity, with a 2021 valuation around $4 billion. However, it will likely be far less than Nvidia’s market value.
Investing in IPOs can be risky, especially with companies in early stages like Cerebras. But if it proves successful, the potential rewards could be significant. This stock might appeal to investors with a higher risk tolerance looking for the next big thing in AI.
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