Coatue Opened Positions in Intel and Cerebras. Is the AI Chip Trade Broadening Beyond NVIDIA?

On June 30, the Q2 filing of investment firm Coatue Management revealed a new position in Intel and, for the first time, a reportable position in Cerebras Systems. Intel Corporation (INTC) is a leading provider of manufacturing and distribution solutions, while Cerebras Systems (CBRS) offers a novel wafer-scale architecture. Coatue reported ownership of 12,084,027 Intel shares and approximately 7.01 million Cerebras shares.

The bullish case for Intel highlights its strategic relevance, advanced packaging, and domestic manufacturing footprint, potentially benefiting from increased government and customer supply options. The bearish case, however, emphasizes Intel's capital intensity and competitive challenges against AMD and the company's ability to establish external customers.

Cerebras' growth is driven by its Q2 non-GAAP core revenue, which increased by 103% year-over-year to $209.9 million. The cloud-service revenue also saw rapid growth as customers opted to rent inference services instead of purchasing hardware. With 78 hedge funds investing in the company, Coatue's disclosed position is worth roughly $1.5 billion, making it economically significant.

However, concerns regarding Cerebras' volatility and business mix persist. The company's total Q2 revenue, under GAAP presentation, amounted to about $180.1 million, with hardware sales falling 23% to $54.1 million and shares declining sharply after the results. As the AI chip trade seems to broaden, the positions in Intel and Cerebras underscore Coatue's exposure to the sector, but they do not constitute a complete evaluation of the managers' risk.