AI-related technology stocks advanced Monday, with Cerebras Systems climbing about 6% in premarket trading and Microsoft rising more than 1.6%, as analysts pushed back on partnership concerns and highlighted growing enterprise demand for AI security and governance.
Cerebras recovered some of last week's losses after OpenAI CEO Sam Altman sought to reassure investors about the companies' relationship. Altman said in a post on X that Cerebras is a "close partner" with a "deep engagement pushing on the frontiers of speed." The stock had plunged 20% to its lowest level after reports said OpenAI would use Nvidia graphics processing units to power the "Ultrafast" mode of its GPT-6.1 Sol model rather than Cerebras chips. Cerebras shares remain down more than 40% since their Nasdaq debut in May.
Several analysts argued the selloff was overdone. Barclays analyst Tom O'Malley said OpenAI's relationship with Cerebras "remains strong" and called the decline overdone. Freedom Capital upgraded Cerebras to Buy from Hold, with analyst Paul Meeks setting a $209 price target, implying more than 25% upside. Citi analysts maintained their revenue outlook for 2026 through 2028, saying it is "too early to read much into" the initial rollout of frontier AI models on internal chips. Mizuho reiterated its Outperform rating and $300 price target, estimating the fast-inference total addressable market could reach $550 billion by 2030, representing a 291% compound annual growth rate. OpenAI has reported inference speeds up to 14 times faster using Cerebras technology, and Cerebras signed a $10 billion agreement with OpenAI in January to provide 750 megawatts of computing power through 2028.
Microsoft shares also gained after Melius Research upgraded the software giant to Buy from Hold and lifted its price target to $665, implying more than 26% upside. Melius analyst Ben Reitzes said enterprises are increasingly seeking a "secure wrapper" for AI deployment rather than relying directly on frontier AI labs. The firm said Microsoft is becoming the "adults in charge" for enterprise AI security and governance, and expects Azure growth to accelerate beyond 50% by the fourth quarter of fiscal 2027. Melius raised its fiscal 2027 and 2028 earnings estimates and initiated a fiscal 2029 earnings estimate of $30.77 per share, about 7% above consensus. Piper Sandler also raised its Microsoft price target to $610 from $550, estimating that every 10% shift in customer seats from E5 to E7 could generate about $2 billion in annualized revenue.
