Cerebras, Broadcom, Nvidia Stocks Decline on Valuation Concerns; Analysts See Oversold Opportunity

According to analyst commentary, three major AI chip stocks have retreated since mid-May following market concerns about elevated valuations. Cerebras, which listed at $185 on May 9, surged to $350 on its first trading day but has since fallen approximately 18%. Despite its 97x price-to-sales ratio—far above the tech industry average of 8x—analysts note that commitments from OpenAI ($20 billion over coming years) and Amazon AWS cloud integration may provide upside. Broadcom reported second-quarter non-GAAP earnings per share of $2.44, exceeding expectations, with AI semiconductor revenue rising 143% year-over-year to $10.8 billion. Its stock has corrected from a 88x P/E multiple to approximately 65x, creating what analysts view as an overreaction. Nvidia maintains an 88% data center GPU market share with a P/E of roughly 30x, considered reasonable relative to peers. Analysts suggest current weakness may present buying opportunities.
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