Cerebras Systems (CBRS) is expected to benefit from increased demand for low latency inference solutions with its wafer scale technology, Morgan Stanley said in a Monday note.

As AI workloads become reasoning-intensive, demand for fast, low-latency inference is growing rapidly, the report said.

"Supported by a large contracted backlog and a 750MW committed capacity agreement, we believe Cerebras is

well positioned to capture this opportunity," the note said.

The note also said Cerebras is an AI processor company with a first-mover advantage against Nvidia (NVDA).

Contracted revenue opportunities get them to $6 billion revenue, about 1% market share of overall processors, by 2028, it said.

"We are optimistic that there can be upside," the report said.

Morgan Stanley initiated coverage on the stock with an overweight rating and a $250 price target.

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