Cathie Wood’s ARK Invest bought about $6.7 million worth of Cerebras Systems (CBRS) stock and sold $6.3 million worth of Palantir Technologies (PLTR) stock on Wednesday, October 14. The trades came as AI stocks faced pressure after hotter-than-expected U.S. inflation data raised concerns about borrowing costs.
Both stocks extended their losses in Thursday’s premarket trading. Cerebras fell 3.31% to $136.79, following a 5.1% drop on Wednesday. Similarly, Palantir slipped 1.81% to $197.33, after losing 3.69% in the previous session.
Cathie Wood Buys $6.7 Million of Cerebras Stock
ARK Invest bought 44,689 Cerebras Systems shares worth about $6.7 million on Wednesday, October 14.
Cerebras makes chips and computer systems that help run AI models. Its deal with OpenAI is worth more than $20 billion and covers 750 megawatts of computing capacity over several years. The agreement could bring in significant revenue as OpenAI expands its AI services. However, Cerebras’ growth will also depend on OpenAI’s ability and willingness to fund its computing needs.
Meanwhile, Cerebras faces a possible source of selling pressure. On October 14, its IPO lock-up period ended, making up to 19.4 million shares eligible for sale. These shares belong to investors who were restricted from selling during the lock-up period. If some of them choose to cash out, the added supply could weigh on the stock, even as the company pursues growth through its OpenAI deal.
Is CBRS Stock a Good Buy?
Overall, Wall Street has a Strong Buy consensus rating on Cerebras stock based on 10 Buys. The average CBRS stock price target of $288.67 indicates about 104% upside potential.
Cathie Wood Sells $6.3 Million in Palantir Stock
Palantir sells software that helps companies and government agencies analyze data and make decisions. ARK Invest sold 31,432 Palantir shares worth about $6.3 million on Wednesday. The sale came after Palantir stock rallied more than 60% since the company reported its second-quarter results in early August.
Palantir’s business continues to grow at a fast pace. Second-quarter revenue rose 93% year over year to $1.94 billion. U.S. commercial sales climbed 149% to $764 million. Following these results, the company raised its full-year revenue outlook to between $8.15 billion and $8.16 billion.
However, the stock’s high valuation remains a concern despite this growth. Palantir trades at a forward price-to-earnings (P/E) multiple of 128.83x based on non-GAAP earnings, well above the sector median of 22.8x. This high valuation leaves less room for disappointment if growth slows.
ARK has not explained why it sold the shares. The sale followed Palantir’s strong rally, but there is no confirmation that the fund sold to lock in gains or changed its view of the company.
Is Palantir Stock a Strong Buy?
Overall, Wall Street has a Moderate Buy consensus rating on Palantir Technologies stock based on 18 Buys, four Holds, and two Sells. The average PLTR stock price target of $210.67 indicates a modest upside of about 5%.
