AMD vs. Cerebras: Cathie Wood Buys One AI Chip Stock, Dumps the Other

Chip stocks have had another huge year, with AI spending still doing most of the heavy lifting. The upside is clear enough, as cloud giants keep pouring money into faster training and inference systems. The risk is just as obvious, since valuations have already priced in years of very strong growth.

That helps explain Cathie Wood’s latest moves. She clearly still sees plenty of opportunity in AI chips, but she is choosing her spots carefully. Since Cerebras Systems (NASDAQ:CBRS) went public last week, Wood has bought 337,571 shares, including 71,655 shares on Wednesday. The IPO itself was a blockbuster, with Cerebras raising $5.55 billion and landing on Nasdaq after sealing high-profile deals with OpenAI and AWS.

Cerebras operates in a very different corner of the AI chip market than AMD and Nvidia. Instead of focusing primarily on traditional GPUs, the company built its reputation around giant wafer-scale processors designed to handle enormous AI workloads with fewer bottlenecks and lower latency. Cerebras has been pushing aggressively into AI inference, which is the process of actually running AI models in real time after training is completed. That area is becoming one of the most important battlegrounds in AI as enterprises search for faster responses, lower costs, and more efficient deployment at scale.

One investor, known by the pseudonym Simple Investment Ideas, calls Cerebras an “expensive, risky, and volatile stock,” but believes the company has a “clear path to becoming a leading beneficiary” as AI demand moves toward real-time inference. In his view, partnerships with OpenAI and AWS give Cerebras more credibility, while its focus on speed could give it a “true competitive advantage” if faster AI responses become the next big battleground.

Advanced Micro Devices (NASDAQ:AMD), meanwhile, tells a very different Cathie Wood story. Through her various ETFs, Wood sold 673,213 AMD shares over the past month, trimming exposure after a massive run in the stock. That does not mean AMD is suddenly out of the AI race, but it does suggest Wood may see a better risk-reward elsewhere after the rally.

Investor James Foord, ranked in the top 3% of stock pros on TipRanks, says AMD is “arguably overpriced,” while adding that the “market has run too far” on both fundamentals and technicals. Foord also believes AMD may need to “check back towards the $350 level,” as investors eventually rotate out of semiconductors and into the next big thing.

Wall Street, meanwhile, appears far less worried. AMD still enjoys a Strong Buy consensus rating based on 28 Buy ratings against 8 Holds, showing that most analysts continue to view AMD as one of the strongest long-term beneficiaries of the AI boom. While the Street’s average price target of $461.38 points to only limited upside after the monster rally, some bulls still see considerably more room ahead, with the highest target currently sitting at $625. (See AMD stock forecast)

Disclaimer: The opinions expressed in this article are solely those of the featured investors. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.