Hardware's Hidden Edge: Why AI Infrastructure Stocks Like Cerebras and Quantum Computing Are the Smart Play

The AI revolution is no longer a distant promise—it's a sprawling reality reshaping industries from healthcare to finance. Yet, amid the frenzy over software giants like OpenAI and ChatGPT, a critical truth is often overlooked: hardware is the foundation of AI's scalability. Without advanced chips, data centers, and specialized infrastructure, even the most sophisticated algorithms remain theoretical. This is where Cerebras Systems and Quantum Computing Inc. (QUBT) shine—two overlooked enablers of the AI era offering a safer, less speculative entry point than overhyped software plays. Let's dissect why these companies are primed to profit as the world races to deploy next-gen AI systems.

The Case for AI Hardware: The Unsung Workhorses of the Revolution

While AI software grabs headlines, the real bottleneck lies in physical infrastructure. Training large language models (LLMs) requires exorbitant compute power, and deploying them at scale demands energy-efficient chips and robust data pipelines. This is where Cerebras and QUBT excel. Unlike speculative software firms with no revenue or products, these companies are proven enablers with tangible partnerships and cutting-edge tech. Their valuations are far more grounded, making them a prudent hedge against AI's volatility.

Cerebras Systems: The Wafer-Scale Giant Poised for an IPO

Cerebras' Wafer-Scale Engine (WSE) is a paradigm shift in AI hardware. Its WSE-3 chip packs over 2.1 trillion transistors onto a single wafer, enabling unprecedented training speeds for LLMs. Major clients like Microsoft, Meta, and IBM already rely on Cerebras' systems, with over 85% of 2024 revenue tied to UAE-based partner Group 42 (G42)—a strategic advantage in the Middle East's booming AI ecosystem.

Financials & Valuation:
- Revenue: $78.7M (2023), up 212% from 2022.
- Losses: $127M (2023), but narrowing as WSE-3 ramps up.
- IPO Outlook: Targeting a $7–8B valuation post-IPO under ticker CBRS, with $750M–$1B raised.

Despite delays due to U.S. regulatory hurdles (CFIUS scrutiny of G42 ties), Cerebras' tech is unmatched. Its IPO—expected by Q3 2025—will open the door for investors to capitalize on its first-mover advantage in wafer-scale AI chips.

Quantum Computing Inc. (QUBT): Building the Quantum Future, Today

QUBT's Quantum Photonic Chip Foundry in Arizona is a game-changer. By manufacturing thin-film lithium niobate (TFLN) chips, it's enabling breakthroughs in quantum computing and photonic AI systems. Recent wins include a NASA subcontract ($406K) for space-based LIDAR noise reduction and a sale to Delft University's quantum lab.

Financials & Valuation:
- Revenue: $39K (Q1 2025), but $166M cash from a recent private placement.
- Partnerships: Automotive giants, Sanders TDI, and defense contracts signal scalability.
- Valuation: Trading at a price-to-sales ratio >4,500x—high, but justified by its foundry's strategic importance.

While QUBT's top-line is tiny, its foundry model (selling chip fabrication services) offers a clear path to profitability. The $93.6M raised in 2025 provides ample runway to scale production.

Why These Stocks Beat Pure-Play AI Software Plays

Metric	Cerebras/QUBT	Pure-Play AI Software
Revenue & Profits	Growing, tangible contracts	Often negative, no recurring revenue
Valuation	Grounded in hardware demand	Sky-high multiples (e.g., 50x+ sales)
Risk Exposure	Supply chain, regulatory	Overhyped expectations, IP lawsuits
Long-Term Moat	Unique tech/IP (WSE, TFLN)	Dependent on algorithmic innovation

The contrast is stark: hardware companies are asset-backed, while software firms are often asset-light and speculative. Investors wanting to ride AI's growth without overpaying should focus on the infrastructure layer.

Investment Thesis: Buy the Infrastructure, Not the Hype

Cerebras' IPO is a once-in-a-decade opportunity to own a foundational AI hardware player at a pre-bubble valuation. Its $8B post-IPO target is a fraction of rivals like NVIDIA ($1T+), yet its WSE tech is unmatched for LLM training.

QUBT, despite its high P/S ratio, is a long-term bet on quantum's commercialization. Its foundry is a moated asset with defense and automotive ties, and its $166M cash pile reduces near-term dilution risk.

Risks to Consider

1. Regulatory Delays: Cerebras' IPO hinges on final CFIUS clearance.
2. Market Volatility: Both companies are tied to tech cycles; rising interest rates could stall demand.
3. QUBT's Execution: Scaling foundry output and proving ROI for clients remains unproven.

Final Call: A Balanced Approach

• Cerebras: Wait for the IPO. A valuation below $7B would be ideal, but even at $8B, its WSE dominance justifies a position.
• QUBT: Buy now if you can stomach volatility. Target a dip below $2/share (current: ~$3), but monitor SEC filings and foundry utilization metrics.

The AI revolution isn't just about algorithms—it's about hardware that makes those algorithms possible. Cerebras and QUBT are the unsung heroes of this shift. For investors seeking to capitalize on AI without overpaying, these stocks are the safest, most undervalued enablers of the future.

Stay tuned for updates on Cerebras' IPO timeline and QUBT's Q2 2025 results.