NEW YORK — Jim Cramer recently highlighted Cerebras Systems, a private AI chipmaker, drawing investor attention to the company's hardware. Cerebras, known for its Wafer-Scale Engine, develops specialized chips designed for large AI model training and inference. Its private status means direct equity investment remains unavailable to public market participants.
Cerebras competes in the high-performance computing segment against established players like Nvidia. The company's large, single-die processors aim to offer efficiency advantages over traditional GPU clusters for specific AI workloads. This technology has attracted more than $720 million in venture capital funding across multiple rounds, signaling market confidence in its potential and technological differentiation. Cerebras has secured contracts with government entities and research institutions for its AI supercomputers.
For investors seeking exposure to the AI chip sector, Nvidia remains the dominant public option. Nvidia shares trade at $235.74, up 4.4 percent today, reflecting continued robust demand for its data center GPUs. The company reported first-quarter revenue of $26 billion, with data center revenue hitting $22.6 billion, up 427 percent year-over-year. CFO Colette Kress said sovereign AI orders now represent a double-digit percentage of data center bookings. JPMorgan maintains a $280 price target on Nvidia, citing the expanding AI infrastructure buildout and new demand categories.
Microsoft, a major consumer of AI chips and a leading cloud provider, also offers a direct play on the AI infrastructure boom. The company trades at $409.43, up one percent today, as its Azure cloud platform powers numerous AI applications. Microsoft's investments in custom AI silicon development, including its Maia and Cobalt chips, and its strategic partnerships with chipmakers like Nvidia, further cement its position in the AI ecosystem. Its third-quarter fiscal 2024 Intelligent Cloud revenue grew 23 percent to $35.1 billion, largely driven by Azure.
The AI hardware market continues to see significant capital inflows, with demand outstripping supply for critical components. This environment benefits not only chip designers but also infrastructure providers and cloud companies. The focus on Cerebras by prominent market commentators like Cramer indicates the intense demand for specialized AI processing power. While Cerebras represents a cutting-edge private investment, public markets offer robust alternatives through companies directly selling or heavily utilizing AI hardware.
