Artificial intelligence stocks have powered gains in recent years, with Nvidia and Micron Technology posting triple and quadruple-digit percentage increases. But momentum has stalled for some AI infrastructure plays as investors question the sustainability of large tech spending and broader economic headwinds.
This pullback creates an entry point for aggressive investors. CoreWeave (CRWV) and Cerebras Systems (CBRS) have both declined sharply, yet Wall Street analysts project each could gain 75 percent over the next 12 months based on average price target estimates.
CoreWeave differentiates itself from general cloud providers like Amazon and Microsoft by focusing exclusively on AI infrastructure. The company reported record revenue of $2.6 billion in its most recent quarter and became the fastest cloud provider to reach $5 billion in annual revenue. Nvidia holds CoreWeave as its third-largest portfolio position and gave CoreWeave first-mover access to its latest platforms, a signal of deep strategic partnership.
The stock has fallen 37 percent since early May. CoreWeave is highly leveraged—utilizing debt financing to expand infrastructure capacity—making it a high-risk, high-reward bet suitable only for investors with significant risk tolerance. Nvidia's confidence in the company's execution is a directional indicator for the AI infrastructure buildout thesis.
Cerebras Systems (CBRS) went public in May, with shares climbing 68 percent on day one before declining about 9 percent since. The pullback reflects broad investor caution on AI stocks, not company-specific headwinds.
Cerebras positions itself as a direct competitor to Nvidia in AI accelerators. Its proprietary Wafer-Scale Engine (WSE) chip is 58 times larger than Nvidia's B200 and delivers over 2,000 times the memory bandwidth of two combined Nvidia chips. The company claims fastest-in-market inference capabilities, a potential edge as AI inference workloads scale across enterprise and cloud deployments.
Both stocks hinge on the continuation of enterprise AI infrastructure investment. If capex growth accelerates through 2025, these valuations reset higher. If spending growth stalls, both face downside risk.
