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Market Data Table

Breakfast News: Cerebras Challenges NVDA's Throne

August 19, 2026

Tuesday's Markets
S&P 500 7,692 (-0.69%)
Nasdaq 26,290 (-1.33%)
Dow 53,343 (-0.22%)
Bitcoin $64,593 (+0.49)

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1) Cerebras Unveils New AI Chip

Chart comparing the market performance of Cerebras, Nvidia, and the S&P 500 over the past 12 months, with Nvidia up 25%, the S&P up 20%, and Cerebras down 29%.

Cerebras Systems (NASDAQ:CBRS) just unveiled the CS-4 AI processor, claiming 30 times the inference speed per user of rival graphics chips from Nvidia (NASDAQ:NVDA). Three wafer-scale processors, each the size of a dinner plate and packing 4 trillion transistors, sit on one chip instead of several wired together. That single-chip design skips the data-travel time multi-chip systems need. And it makes room for faster, pricier SRAM memory that's normally too costly for standard chips.

Speed is the pitch: Cerebras thinks customers will pay a premium to run today's biggest artificial intelligence (AI) models faster, instead of settling for smaller models just to get speed. Fool contributing analyst Jose Najarro isn't convinced: He's flagged Cerebras's reliance on a handful of huge customers, warning that if AI chip supply ever outpaces demand, Cerebras "would be one of the first to take a massive hit."
Wall Street wants proof, not promises: The stock barely moved on the news, and is down more than 35% since Cerebras's rocky May IPO. Better-than-expected third-quarter guidance couldn't offset a wider loss per share. Fast chips haven't turned into profit yet, and that's the gap it needs to close.

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2) Yields Spike, Stocks Barely Blink

U.S. futures were flat before the open on Wednesday, even as a global bond sell-off pushed borrowing costs to their highest levels in decades. The 30-year Treasury yield hit a 19-year high, and long-term bonds in Japan, Germany, and France all touched multi-decade peaks of their own. Despite the scale of the move, stocks barely reacted. This suggests equity investors aren't yet convinced that higher rates will derail the current earnings picture. Attention now turns to this afternoon, when the Federal Open Market Committee (FOMC) releases its July meeting minutes, and traders want to know just how split the Federal Reserve really is on the path for further rate hikes.

Corporate cash flow is cushioning stocks: Strategists point to strong current earnings as the reason stocks have shrugged off the bond rout. They argue that resilient corporate fundamentals are doing more to drive this market than headline-grabbing yield moves. That disconnect could narrow quickly if earnings show cracks.
The Fed isn't unified: Three officials dissented at the July meeting, and Wednesday's minutes could reveal how deep that split runs. Details like this often move markets more than the rate decision itself, since it shapes expectations for what comes next.

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3) OpenAI Losses Widen, Nvidia Watches

OpenAI told investors its revenue grew 18% quarter over quarter to $6.7 billion, reports The Wall Street Journal. But its operating loss widened to $12.3 billion. Anthropic more than doubled its own revenue to $11.6 billion and posted a small operating profit. That gap matters far beyond the two private AI labs. Nvidia and Oracle (NYSE:ORCL) have struck massive computing deals that assume OpenAI will eventually generate hundreds of billions in annual revenue. And OpenAI's growth rate lagged Palantir (NASDAQ:PLTR), CoreWeave (NASDAQ:CRWV), and Micron (NASDAQ:MU) over the same period.

The AI infrastructure trade rests on OpenAI's revenue catching up to its spending: Nvidia and Oracle have effectively underwritten a bet on OpenAI's future scale. And any sign the gap is widening rather than closing could ripple through the balance sheets and stock prices of every company tied to those deals.
Leadership churn is the tell to watch: OpenAI has lost its chief revenue officer and former chief operating officer in a wave of recent departures. That’s a sign its growth problem may be organizational as much as competitive. That kind of trouble tends to result in personnel turnover before it shows up in the numbers.

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4) Key Earnings Today: Target, Lowe's, and BILL Holdings

Target (NYSE:TGT) reported a 5.3% sales rise year over year in its second quarter. Management now predicts full-year net sales growth around 5%, above prior guidance. The stock fell close to 4% in response, after a tariff refund lay behind its earnings beat. It follows yesterday's report from Dividend Investor recommendation Home Depot (NYSE:HD), which has extended its dividend increase streak to 17 straight years.
Lowe's (NYSE:LOW) posted an 8.3% rise in total Q2 sales compared to the same quarter last year, reaching $26 billion. Chairman, president, and CEO Marvin R. Ellison said, "Sustained growth in Pro, Online and Home Services led to our fifth consecutive quarter of positive comparable sales, despite pressure in discretionary DIY spending." The stock dipped over 2% in early trading, as the company predicted full-year sales at the lower end of previous guidance.
BILL Holdings (NYSE:BILL), a Hidden Gems recommendation, reports after market close. Last quarter, it grew core revenue 16% to $371 million and posted its first-ever GAAP profit. Watch the final cost of a workforce cut of up to 30%, progress on its $1 billion buyback, and whether guidance of $425 million to $435 million in revenue holds up as it leans into AI.

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5) Comfortably Beating the Market

Team Hidden Gems

Comfort Systems (NYSE:FIX) spent decades as an unglamorous commercial HVAC contractor that heated and cooled hospitals and office buildings. That expertise is now helping the cloud giants to cool the AI data centers they're rapidly building. Team Hidden Gems first recommended Comfort Systems in March 2025 in our Moneyball Portfolio at $355. With shares at $1,739, we're sitting on nearly a 5x in 18 months. We've recommended it 14 more times across services, and every investment is profitable to date. How did we find it, and what do we think now?

It starts with our Hidden Gems Moneyball Superscore: Comfort Systems is the fourth-highest-rated company in our AI-powered database out of 4,368 businesses. It sits behind only Taiwan Semiconductor (NYSE:TSM), Eli Lilly (NYSE:LLY), and Nvidia.
We invest in misunderstood companies: The market still prices Comfort Systems like the cyclical, low-margin contractor it used to be. Investors are still playing catch-up to the AI build-out. Net income surged more than 90% last quarter.
Technical superiority over tradition: Few contractors can handle cooling and electrical work at data center scale. Comfort Systems' edge is modular fabrication; it prefabricates whole systems in a factory and installs them faster than rivals build on-site. Its capacity is on track to reach 4 million square feet by year-end, up from 3.5 million in the second quarter.
Expert leadership: What CEO Brian Lane and team have achieved is spectacular. They combine vision, operating excellence, and financial discipline

This isn't a cheap stock at 34 times forward earnings. But at $1,739 per share today, we still believe it can deliver 13%-14% annualized returns over the next five years.

Team Hidden Gems has a five-year price target of $3,285.88.

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6) Your Take

Would a stock up almost 5x in 18 months still tempt you to buy, or has it run too far?

Debate with friends and family, or become a member to hear what your fellow Fools are saying!