For investors looking for ways to invest in semiconductor stocks outside of the usual suspects, last month offered an opportunity with the Cerebras Systems (CBRS 6.68%) initial public offering (IPO). With its giant chips, it’s taking a differentiated approach from traditional semiconductor companies, like Nvidia.

Its IPO was priced at $185, with shares opening to the public on May 14 at $350. Shares fell 20% by the next day, which isn’t surprising given the momentum trap associated with IPO investing.

The risks of chasing IPO excitement

IPOs are enticing because they feel like a ground-floor opportunity, so it’s easy to be lured in by the excitement. Cerebras specifically generated a lot of interest because it is an artificial…