#3. Coherent Corp. (NYSE:COHR)
Analyst Upside: 96.11%
30-Day Decline: 30.38%
Short Interest: 5.66% of Float
Number of Hedge Fund Holders: 105
Coherent lost 7.9% on October 12 alone as optical stocks sold off following concerns about funding the AI buildout. Its full-month decline reached 30.4%. That financing issue reaches Coherent through its customers. Optical components generate revenue when networks are built, so deferred data-center projects can delay orders even when computing demand remains strong.
Whale Rock increased its Coherent stake by 25.3% to 1.22 million shares in Q2, even as the overall hedge fund count fell to 105 from 114. Its $482.1 million position represented 3.87% of its reported 13F portfolio at June-end. The falling count therefore masks substantial buying by an existing holder. September 30 short interest was 5.66% of float. Susquehanna then lowered its target from $425 to $350 on October 21. That puts its revised target well below the $410.43 consensus.
Bulls see a product transition that can outlast the spending scare. Moving more data between AI processors increases demand for optical links, and Coherent supplies the photonic components and systems behind those connections. Fiscal fourth-quarter revenue rose 34% to $2.05 billion, while GAAP gross margin improved 2.77 percentage points to 38.5%. Expanding production while preserving that margin gain would turn rising demand into stronger earnings.
The same shift toward faster optical links is also creating opportunities for component suppliers such as MACOM. Our comparison explains how MACOM’s 3.2-terabit chipset and Coherent’s production scale offer different exposure to that upgrade.
#2. CoreWeave, Inc. (NASDAQ:CRWV)
Analyst Upside: 159.18%
30-Day Decline: 37.58%
Short Interest: 17.24% of Float
Number of Hedge Fund Holders: 71
CoreWeave’s 37.6% slide points to the market’s growing worries over the cost of financing AI capacity. Second-quarter net interest expense reached $640 million, against $2.575 billion of revenue. Floating-rate borrowing leaves earnings exposed when rates rise, even if demand for computing remains strong. The distinction is existing debt versus future funding: our CoreWeave–IREN comparison traces how higher rates reach today’s interest bill and tomorrow’s expansion costs.
On the other hand, hedge fund ownership rose to 71 holders from 63 in Q2. September 30 short interest reached 17.24% of float. Shares sold short increased 9.1% from mid-September. So there’s both interest and skepticism among hedge funds, although gross short positions can include hedges. The $140.58 consensus target implies 159.18% upside from $54.24; UBS nevertheless cut its target from $120 to $105 on October 23.
Bulls have operating growth to point to, as quarterly revenue more than doubled, and June-end revenue backlog reached about $104 billion. That backlog excludes over $25 billion of commitments added early in Q3, but remains subject to delivery and service-availability requirements. CoreWeave must turn contracted demand into operating cash while funding new capacity and servicing debt.
#1. Cerebras Systems Inc. (NASDAQ:CBRS)
Analyst Upside: 163.17%
30-Day Decline: 46.00%
Short Interest: 14.12 Million Shares
Number of Hedge Fund Holders: 78
Cerebras lost 46.0% over the 30-day window as investors questioned how much OpenAI’s inference demand would flow through its hardware. Reports that a newer OpenAI ultrafast offering was running on Nvidia GPUs challenged expectations for Cerebras’ role. However, competition and the need to fund capacity ahead of revenue remain the more durable risks.
The stock had a $291.64 average price target, implying 163.2% upside from $110.82, but dated the consensus update October 5. TD Cowen subsequently cut its target from $275 to $175 on October 19 while maintaining Buy. That lower target implies 57.9% upside. The revision narrowed the apparent opportunity. Insider Monkey counted 78 hedge fund holders in Q2 for the stock. September 30 short interest totaled 14.12 million shares, up 10.3% from September 15. Coatue reported 7.01 million Cerebras shares worth $1.55 billion at June-end, or 3.19% of its reported 13F portfolio, alongside a new Intel holding. Its Cerebras beneficial ownership included 6.67 million Class B shares convertible into Class A. Our review of those positions examines the case for alternatives to Nvidia and the operating hurdles each company still faces.
Bulls can point to a growing cloud business because in the second-quarter, CBRS’s cloud and services revenue reached $126 million, up 281%, while remaining performance obligations totaled $25.4 billion. Consolidated GAAP gross margin was 14%, versus 41% on the company’s adjusted core basis, which excludes warrant amortization, stock compensation and other items. Even on that basis, operating margin remained negative 16%, so rapid growth has yet to produce operating profitability.
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