The market doesn't always reward a good quarter right away, and Cerebras Systems (CBRS) may be the latest example. Shares of Cerebras – which designs AI chips and develops AI infrastructure and is a potential rival to AI giant Nvidia Corporation (NVDA) – tumbled after reporting its first earnings results as a publicly traded company. Investors zeroed in on near-term gross margin concerns. But several Wall Street analysts argue the market may be missing the forest for the trees.
Morgan Stanley, for one, is bullish on Cerebras. Instead of backing away after the post-earnings dip, analyst Joseph Moore reiterated his “Overweight” rating and lifted his price target to $273 from $250. His view is that the softer margin outlook reflects conservative guidance rather than weakening demand. In fact, the analyst believes Cerebras is playing the long game as it builds out one of the world’s largest AI cloud businesses.
