Cerebras Stock Is Under Pressure, But Cathie Wood Bets $17.2 Million On It

Ark Invest, led by Cathie Wood, has increased its stake in Cerebras Systems (CBRS) stock despite recent volatility, investing around $17.2 million in the company. This move comes after Cerebras' stock dropped 8% in the past month and 32.4% since its May 14 listing. The timing of the investment is not unusual, as Wood often adds exposure during market selloffs.

Wood is betting on Cerebras' long-term potential, focusing on the company's infrastructure capabilities rather than its short-term challenges. Cerebras reported a 103% year-over-year increase in core revenue to $209.9 million in Q2, with cloud business revenue rising 287% and core hardware revenue growing 17%. The company's core gross margin improved to 40.6% in Q2, up from a loss of 42% in the previous year, while the company aims for a long-term core gross margin of over 60%.

Cerebras has secured over 600 megawatts of data center capacity and is expanding manufacturing capacity tenfold in 2026, which could lead to revenue growth without permanently impacting the cost structure. Despite its high-risk, high-reward nature, Cerebras currently holds a "Strong Buy" rating from 8 out of 11 analysts covering the stock, with an average target price of $283.91, implying a potential upside of 35.1% from current levels.