Nvidia has made many investors wealthy, particularly through its strong position in artificial intelligence (AI) stocks, which have seen significant growth recently.
If you’re interested in Nvidia but seek more diverse investments, consider Cerebras, a tech company that may compete with Nvidia in the future.
Could Cerebras be the next big AI stock?
Cerebras claims to have the “world’s largest, most powerful commercially available chip,” the Wafer-Scale Engine (WSE-3), which is 57 times larger than leading GPUs and is designed for AI training. The company has seen rapid growth, generating $136.4 million in revenue in the first half of 2024, surpassing all of 2023’s revenue of $78.7 million.
Notable risks to consider
Despite its growth, Cerebras is not yet profitable, facing a net operating loss of $41.8 million in the first half of the year, although this is an improvement from last year. Additionally, 87% of its revenue comes from one customer, Group 42 Holding, meaning its financial performance is heavily reliant on this single client.
Should you invest in Cerebras when it goes public?
Cerebras may go public this year, and while it was valued at around $4 billion in 2021, it might be worth more now but likely not as much as Nvidia. Investing in IPOs can be risky, but if Cerebras proves successful, the potential rewards could be substantial. If you’re open to high-risk investments, Cerebras might be worth considering.
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