These 2 AI Stocks Have Stumbled. Now They May Soar Nearly 75%, According to Wall Street.
2026-10-12 09:10
•Adria Cimino •The Motley Fool
•••••• ••••••• Axe Cap view
AI Infrastructure Stocks Stumble, But Bright Prospects Await
Two AI infrastructure companies have fallen sharply yet may offer big upside, with Nvidia’s role pivotal.
CoreWeave and Cerebras Systems have taken hits recently, down 37% and 9%, respectively. Both are niche players in AI cloud computing, a sector buzzing with promise but fraught with volatility. CoreWeave stands out with its record $2.6 billion quarterly revenue and a strong partnership with Nvidia, the GPU giant. Cerebras, newer and less known, launched a chip system they claim is vastly faster than traditional GPUs. This is important because speed and efficiency are everything in AI workloads. If they deliver on these innovations, they could disrupt older players and command higher valuations. For South African investors, these developments highlight why USD/ZAR deserves attention. A stronger rand would lower the cost of tech imports but also bite into earnings from global sales for companies with local exposure. Caution is warranted: if big tech slows AI spending, these startups might struggle to grow — a common risk in hype-driven sectors. Still, the ~75% upside Wall Street expects might be worth a watch, especially given Nvidia’s backing. this is just our opinion and not financial advice
For JSE investors, keep an eye on USD/ZAR as a proxy for tech risk appetite. At current levels, consider a small, tactical exposure in currency pairs if you expect a tech rebound, but avoid direct bets on South African stocks until global AI spending proves durable.
- USD/ZAR
- NVDA
- Big tech cuts back on AI infrastructure spending
- Volatility and overvaluation in early-stage AI stocks could persist
5/10
CoreWeave and Cerebras Systems, two AI infrastructure stocks that have recently declined, are expected by Wall Street analysts to surge approximately 75% over the next 12 months. CoreWeave, a specialized AI cloud provider with strong Nvidia backing, has fallen 37% since May but delivered record revenue. Cerebras, a newer GPU challenger with innovative Wafer-Scale Engine technology, has dropped 9% since its May IPO but reported strong earnings and 200%+ cloud revenue growth.
Our take is based on reporting first published by The Motley Fool.