$Cerebras(CBRS.US) fell 6% on Wednesday, closing at $91.85 with an intraday low of $90.28, marking a new all-time low si…

$Cerebras(CBRS.US) fell 6% on Wednesday, closing at $91.85 with an intraday low of $90.28, marking a new all-time low since its IPO; from the high of $386.34 on its listing day (May 14), it has shed over 70%.

Several factors are weighing on the stock: short-seller Culper Research accused it of rapid wear and tear in its wafer-scale AI chips, suggesting their actual lifespan is shorter than the accounting depreciation period, and also questioned its contract with OpenAI. Additionally, over 50 million shares may become unblocked in early November. These are allegations by the short side, not established facts. On the other hand, UBS lowered its price target from $330 to $250 but maintained a 'Buy' rating, while the market's consensus estimate for Q3 revenue is around $214.7 million. The broader GPU/CPU sector was weak on Wednesday, as capital continues to tighten valuations for the AI compute chain.

Technically, there are no signs of a bottom: the 20-day moving average ($123.3) and 50-day moving average ($163.23) remain far overhead, and the 14-period RSI is only 20, indicating deep oversold conditions within a complete downtrend. Last week's low of $104.18 serves as the first line of reversal confirmation; only a close above this level would suggest the new low was a false breakdown. Until then, a break below the $90 integer support leaves no reference points below.

For those looking to trade a bounce, positions near $90 should be small. Exit if it breaks below $88, with an initial target of $104, offering a risk-reward ratio of approximately 1:3.