After plunging more than 29% last week, Cerebras (CBRS +0.31%) stock is off to a bullish start this week. The semiconductor specialist that designs chips for artificial intelligence (AI) applications had no news to report. Yet, investors are taking note of a well-known growth investor's recent purchase of Cerebras stock.
As of 3:14 p.m. ET, shares of Cerebras are up 18.6%.
Image source: Getty Images.
Cathie Wood sees the sell-off as a buying opportunity
On Friday, Ark Invest -- led by Cathie Wood -- reported that two of its exchange-traded funds acquired shares of Cerebras during the day's trading session.
NASDAQ: CBRS
Key Data Points
The Ark Innovation ETF picked up 16,352 shares, while the Ark Next Generation Internet ETF bought 4,130 shares.
Friday's buying activity complements Ark Invest's purchases from the middle of the week. Last Wednesday, The Ark Innovation and the Ark Next Generation Internet ETF bought 79,174 and 19,980 shares, respectively.
As of Monday afternoon, Cerebras has a 1.5% weighting in the Ark Innovation ETF and a 1.6% weighting in the Ark Next Generation Internet ETF.
Cerebras stock isn't for the faint of heart
Although some investors are drawn to stocks that have recently completed initial public offerings, others keep their distance for exactly the reason we're seeing today: the significant swings IPO stocks often experience.
While Cathie Wood's endorsement of Cerebras stock is notable, investors must remember the risk in blindly following other investors' buying and selling activity. For investors who are interested in Cerebras stock but averse to volatility, an AI exchange-traded fund (ETF) that includes Cerebras among its holdings is a better option right now.
