The CBOE floor in 1999 looked exactly like what we’re seeing right now.
I traded options on that floor from 1999 to 2000, experiencing the dot-com bubble in real time. I watched stock after stock IPO at a price, double on the open, and crater within months.
Last week, Cerebras Systems (CBRS) gave me a *shivers* flashback.
Here’s a quick summary…
The stock was originally priced at $185 on May 13 (already above its $150-$160 range). CBRS opened Thursday, May 14, at $350.
It nearly doubled immediately.
Then it surged to $385 before a trading halt. By the time the closing bell rang, shares settled at $311. A 68% first-day gain.
Did buyer’s remorse set in for those who bought at the top?
You tell me…
By Friday’s close, CBRS was at $279.72, down 10%.
At the peak of their pricing, Cerebras was valued at roughly 130x trailing revenue.
For context, Nvidia (NVDA) – which generated revenue of $62.3 billion, up 22% from Q3 and up 75% from a year ago – trades at roughly one-fifth that multiple.
After just one day of trading, Cerebras now carries a market cap of $100 billion, making it as valuable as ServiceNow (NOW) and Adobe (ADBE), despite sales of just $510 million in 2025.
When it comes to AI names, have we gotten into dot-com territory?
Are buyers simply infatuated with the idea that Cerebras has developed a processing chip the size of a dinner plate?
After all, Cerebras isn’t just building another GPU (graphics processing unit). They’re building something fundamentally different.
The company’s flagship Wafer-Scale Engine 3 is, according to Cerebras, the largest commercialized AI processor in the world. It’s 58 times larger than a leading GPU chip.
That’s some impressive engineering… but it does NOT justify a 130x revenue multiple after one day of trading.
Wall Street will sort this out. But from what I’ve seen in the past, it won’t go well for those who bought at the top.
There is greater value right now in stable, consistent companies trading at far more attractive valuations. Names you can hold for the dividend AND trade the pops on.
Two names I’ve highlighted inside The War Room…
Home Depot (HD): Down 20% this year and carrying a 3% dividend, HD is trading for 20x 2026 earnings. Any pickup in the housing sector could trigger a pop.
McDonald’s (MCD): Down 10% year to date on worries that higher gasoline prices could hit sales, MCD is trading for 20x earnings with a 3% dividend yield. If consumers scale back on luxury meals and pivot to McDonald’s, this is the bargain that pays you to wait.