Cerebras (CBRS) shares have fallen more than 50% from their all-time high as OpenAI's shift toward Nvidia weakens Cerebras's strategic position.
In the week ended October 9, shares of Cerebras Systems (CBRS) once again approached their all-time low since listing on Nasdaq. The AI chip company went public in May this year with a market capitalization of nearly $95 billion and was viewed by investors as a challenger to Nvidia in the AI chip sector. However, its stock price has remained under pressure since then and has now pulled back more than 50% from its historic high.
The immediate catalyst for the sharp pullback was OpenAI's decision to choose Nvidia GPUs, rather than Cerebras chips, to provide computing power support when launching its GPT-6.1 Sol "Ultrafast" mode.
For an AI chip company still in its early commercialization stage, with market attention closely focused on its customer expansion progress, this news quickly sparked investor concerns about its core customer relationships. The market is less concerned with OpenAI selecting Nvidia for a single product launch than with whether OpenAI is handing over more critical inference workloads to Nvidia, which would undermine Cerebras's strategic position in OpenAI's supply chain.
Why Is Cerebras Stock Price Falling?
Cerebras's core selling point is faster processing speeds for specific artificial intelligence workloads, delivered through ultra-large specialized chips and AI computing systems. Compared with Nvidia's general-purpose GPUs, Cerebras seeks to build a differentiated advantage in inference speed, system efficiency, and responsiveness in specific scenarios.
Therefore, when OpenAI chose Nvidia GPUs for the "Ultrafast" mode of GPT-6.1 Sol, the market interpreted it as a competitive signal: even if Cerebras can deliver high-speed inference capabilities, OpenAI may still prioritize relying on Nvidia's mature GPU ecosystem and supply capacity.
The concern quickly magnified because of the massive partnership agreement previously signed between Cerebras and OpenAI. In January this year, the two companies signed a $10 billion agreement under which Cerebras will supply 750 megawatts of computing power to OpenAI over the contract period through 2028. For Cerebras, this agreement signifies not only revenue expectations but also an opportunity to become a key infrastructure supplier for a frontier AI lab.
Precisely for this reason, OpenAI's adoption of Nvidia GPUs for a new product was seen by the market as a repricing of Cerebras's future orders and customer stickiness. If OpenAI hands more inference tasks to Nvidia in the future, Cerebras's order fulfillment, revenue growth, and valuation logic could all be affected.
However, the hardware selection for a single product cannot be directly equated with a reversal in their partnership. Citi analysts stated last week that they have not lowered their revenue forecasts for Cerebras through 2028. Their rationale is that new models from frontier AI labs may initially launch on internal chips before gradually migrating to third-party platforms or the Cerebras cloud, so it may still be premature for the market to conclude from this news that Cerebras is being marginalized.
Citi also pointed out, however, that gross margin is the key variable determining whether Cerebras's stock price can stabilize. The company's valuation remains elevated, and investors need to see revenue growth ultimately translate into more stable profits. If gross margins continue to decline, market confidence could be further hit even if the company maintains its revenue expectations.
In other words, Cerebras's recent decline is not simply because "OpenAI used Nvidia." The news touches on three sensitive issues at once: whether core customers will reduce their reliance on the company, whether long-term contracts can be fulfilled, and whether the company can prove sufficient profitability at a high valuation.
Can Cerebras Keep Rising?
Cerebras still has upside potential, but a stock price rebound will require new fundamental evidence rather than relying solely on the AI chip concept and earlier customer expectations.
First, the market needs confirmation that the $10 billion agreement with OpenAI can consistently translate into actual orders and compute deployment. If the 750-megawatt supply plan proceeds as contracted, Cerebras's revenue visibility will improve significantly. For a company still scaling its commercial operations, stable anchor customers and long-term contracts can help secure financing, expand capacity, and alleviate concerns over customer churn.
In addition, Cerebras needs to prove that its relationship with Nvidia is more complementary than a simple substitution. Nvidia GPUs boast a comprehensive software ecosystem and strong supply capabilities, making them suitable for a broad range of training and inference scenarios. Cerebras, on the other hand, may leverage its advantage in certain inference tasks that require high speed and response efficiency. As long as AI workloads continue to grow, frontier labs do not necessarily have to choose only one chip.
This complementary logic, however, must be validated through actual revenue and customer deployment. If OpenAI and other major clients shift more of their core inference workloads to Nvidia, Cerebras will need new customers, new contracts, or new use cases to fill the gap. Otherwise, the market may re-evaluate its customer concentration and room for growth.
Key catalysts for Cerebras's future stock price may therefore include securing new customer orders, further execution of the OpenAI contract, stabilizing gross margins, and getting more products into actual production environments. Conversely, if order delays occur, customer concentration rises, gross margins decline further, or OpenAI shifts further toward Nvidia, the stock price could remain under pressure.
From a valuation perspective, the market has already priced Cerebras with high growth expectations. A rich valuation means the company must not only maintain growth but also consistently deliver results that exceed expectations. If business progress falls even slightly short, stock price volatility could be amplified.
Cerebras Technical Analysis
Looking at the stock chart of Cerebras Systems, CBRS has dropped below the 0.786 Fibonacci retracement level ($183.24) and is currently testing support near its previous low of $160.81.
After pulling back from its previous high of $265.63, the stock's rebounds have consistently failed to reclaim the 0.618 Fibonacci retracement level ($200.85) and the 0.786 Fibonacci retracement level ($183.24), and momentum has weakened again recently.
Regarding moving averages, the 5-day moving average is at $170.95, the 10-day at $176.97, the 20-day at $184.03, the 80-day at $191.84, and the 160-day at $203.29. The current price is below all moving averages, which are aligned downward sequentially from short- to long-term in a clear bearish setup, with no daily trend recovery signal yet.
$160.81 is currently the most critical support, located in a price area near historical lows. Whether the daily close can hold above this level will determine if a short-term rebound materializes. If the stock convincingly breaks below this price, the previous rebound structure has completely failed, and the price may move down to the 1.272 Fibonacci extension level ($132.30) to seek new support.
Overhead resistance is seen first at the 5-day moving average of $170.95, followed by the 10-day moving average of $176.97 and the 0.786 Fibonacci retracement level of $183.24. Before these levels are reclaimed, any rebound is better viewed as a weak recovery.
This content was translated using AI and reviewed for clarity. It is for informational purposes only.
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