Shares of chip designer Cerebras Systems soared 89% above the initial public offering price on their Nasdaq debut, extending the market’s unrelenting frenzy for companies seen as the biggest beneficiaries of the artificial intelligence boom.

Its shares opened at $350 on Thursday, well above the IPO price of $185 per share, where it raised $5.55 billion. The stock closed at $311.07, up 68%. The jump gives Cerebras a valuation of about $95 billion on a fully diluted basis.

The Sunnyvale, Calif.-based firm’s IPO is the largest so far this year and comes as AI-linked stocks push broader markets to record highs despite challenges to global growth stemming from the Middle East conflict.

Founded in 2015, Cerebras sought to challenge conventional AI computing with its wafer-scale engine, designing chips roughly the size of a dinner plate to speed up processing. Unlike traditional GPU-based systems that rely on clusters of interconnected chips, it packs hundreds of thousands of compute cores onto a single processor.

“In Silicon Valley we understand just how big AI will be, and what that means,” Cerebras CEO Andrew Feldman told Reuters in an interview. “We make AI with training, and we use it with inference. As these models get smarter, the amount we use them will explode.”

The stellar debut, however, could raise questions about whether Cerebras can continue to command its rich valuation over the longer term.

“It (valuation) looked reasonable at the $185 IPO price when looking out to 2028 sales (5.8x EV/sales) and EBITDA (12.8x) metrics,” said Nicholas Smith, senior research analyst at Renaissance Capital, which provides pre-IPO research and IPO-focused ETFs.

“At the current price, it is quite high even out to 2028.”

AI spending surges

As the race to develop faster and smarter AI models heats up, tech giants are pouring hundreds of billions of dollars into the ecosystem.

The outsized demand has prompted a gold rush-like frenzy among investors, with AI-linked stocks seeing eye-popping returns in hopes that the revolutionary technology will upend traditional workflows.

The Dow Jones US Semiconductors Index, which tracks chip heavyweights such as Nvidia, Qualcomm, and Intel, has returned more than 107% over the past year, compared with the S&P 500’s about 26% rise.

Cerebras raised the size and price range of its IPO earlier this week to manage surging interest in its shares. Sources told Reuters that the offering had drawn orders for more than 20 times the number of shares available.

The listing marks its second attempt to go public, after it dropped its plans to list its stock last year. Its partnership with G42, a UAE-based AI company that provided more than 85% of its revenue in 2024, had drawn a national security review by the Committee on Foreign Investment in the United States. The committee eventually cleared the deal.

Since then, Cerebras has secured Amazon and OpenAI, two of the biggest builders of AI infrastructure in the world, as customers.

“There is significant AI excitement, and if investors believe it is poised for significant growth with the OpenAI deal and AWS partnership, they are willing to pay up for it,” Smith said.