Cathie Wood Bets Big on Cerebras and Palantir Stocks After Sharp Pullback

Not many investors embrace volatility like Cathie Wood. At a time when the market usually runs away from growth stocks, Wood starts accumulating stakes in them. The founder and CEO of Ark Invest has been very vocal about the long-term potential of artificial intelligence (AI), and her interest clearly shows in the significant investments that Ark funds make in AI stocks, particularly when they fall out of favor with the market.

Recently, Wood increased her exposure to AI-focused companies Palantir Technologies (PLTR) and Cerebras Systems (CBRS) following a sharp pullback. With the market dumping these two stocks now, Wood is bargain hunting again.

Cathie Wood Stock #1: Palantir (PLTR)

Palantir has long been one of Wood's highest-conviction AI bets. Last week, Wood loaded up on 81,254 shares of PLTR stock worth $9.48 million. Wood holds Palantir stock across numerous Ark Invest exchange-traded funds (ETFs).

While the market has been skeptical of Palantir due to its lofty valuation, its fundamentals tell a different story. Palantir develops AI data analytics software that helps governments and businesses organize massive amounts of data, build AI applications, and make better decisions. PLTR stock is down 29% year-to-date (YTD), compared to the overall market's gain of 9% so far in 2026.

Palantir's first-quarter revenue grew 85% year-over-year (YOY) to $1.63 billion. Government segment revenue increased 76% YOY to $858 million, while commercial revenue touched $774 million, an increase of 95% YOY. While government contracts once accounted for the majority of Palantir's revenue, the commercial segment is growing at a rapid pace. Palantir's AI platform is attracting significant spending from both enterprise customers seeking operational AI and government organizations modernizing mission-critical systems. Palantir ended the quarter with 1,007 customers, with trailing 12-month revenue from its top 20 customers reaching an average of $108 million per customer, up 55% YOY. 

Rapid expansion often comes at the expense of profitability, but Palantir continues to improve in that area as well. Adjusted EPS rose more than 153% YOY to $0.33 per share. While bears question the sustainability of growth, estimates show Palantir’s earnings rising 84% in fiscal 2026 and 40% in fiscal 2027. The stock currently trades at a premium of 99 times forward earnings, reflecting its growing potential. 

On Wall Street, PLTR stock holds a consensus “Moderate Buy” rating. Of the 29 analysts covering the stock, 19 rate it a “Strong Buy,” eight rate it a “Hold,” one has a “Moderate Sell” rating, and one rates it a “Strong Sell.” The average target price of $193.63 suggests potential upside of 54% from current levels, while the high price estimate of $255 suggests as much as 103% potential upside from here.  

Cathie Wood Stock #2: Cerebras Systems (CBRS)

Cerebras recently joined Wood's list of top AI stocks after making its debut in the public market in May. Cerebras is an AI infrastructure company that builds ultra-fast chips and cloud systems designed to run large AI models far faster than conventional hardware. The company's flagship product, the CS-3 system, uses a unique wafer-scale processor that's much larger than conventional chips, enabling faster AI inference with less chip-to-chip communication.

In the week after its initial public offering (IPO), Ark Invest purchased $46.4 million worth of Cerebras shares. Following the explosive IPO — which pushed Cerebras’ valuation close to $70 billion — CBRS stock has cooled off considerably, down 43% from its 52-week high. 

Alongside Palantir, Wood recently purchased 25,795 shares of CBRS stock totaling $5.85 million this past week. Cerebras stock is part of Wood’s ARK Innovation ETF (ARKK) and ARK Next Generation Internet ETF (ARKW).

Cerebras reported its first quarter as a public company on June 23, and the numbers were impressive. Core revenue grew 92% YOY to $191.3 million, with growth across both hardware and Cerebras' cloud-based inference platform. Core hardware revenue totaled $111.6 million, an increase of 60% YOY, while core cloud and services revenue climbed 167% YOY to $79.8 million. 

In the report, the company pointed to its agreement with OpenAI, which committed to purchasing more than $20 billion of compute over the next several years. GPT-5.4 is currently running on Cerebras infrastructure and is available to OpenAI engineers and a select group of customers. Cerebras has also signed a definitive agreement with Amazon's (AMZN) AWS to deploy its technology inside AWS data centers. This allows enterprise customers to access its high-speed AI infrastructure through one of the world's largest cloud providers

However, with OpenAI becoming an enormous customer, Cerebras' customer concentration risk increases. Furthermore, management stated that OpenAI can decide whether deployments occur in Cerebras Cloud or inside its data centers. This means that future revenue timing hinges solely on OpenAI’s deployment decisions and will not be in Cerebras’ control.

Management expects revenue to increase by 88% to $194 million in Q2 fiscal 2026. For the full year, the company guided revenue of $855 million to $865 million. Despite tremendous revenue growth, Cerebras is still operating at a loss with a net loss of $2.5 million in Q1. Cathie Wood's bet on a loss-making company might not make sense now, but losses are not unusual for firms still in their early stages of scaling. Wood also has a reputation for consistently investing in companies she believes can reshape entire industries. Cerebras appears to fit that strategy.

CBRS stock holds a consensus “Strong Buy” rating on the Street. Of the 11 analysts covering the stock, eight rate it a “Strong Buy,” one has a “Moderate Buy,” and two analysts have a “Hold” rating. The average target price of $294.78 implies potential upside of 33% from current levels. Plus, the high price estimate of $325 suggests the stock could climb 47% over the next 12 months.