Cerebras vs. Nvidia: Which AI Stock Is the Smarter Buy Right Now?

The dust is just settling on Cerebras' (NASDAQ: CBRS) impressive initial public offering (IPO), in which the stock price soared 68% on its first day of trading. If there were any lingering doubts about investor enthusiasm for artificial intelligence (AI) stocks, they've certainly been put to rest.

Cerebras' large-wafer technology claims to be a game changer in AI processing, potentially more efficient than Nvidia's (NASDAQ: NVDA). While the jury is still out on its long-term impact on its rivals, Cerebras' blockbuster IPO proved investors have high hopes.

So, with a new AI infrastructure play in town, should investors skip Nvidia stock for Cerebras right now? Here's what investors should know.

Image source: Getty Images.

The case for betting Nvidia remains the center of the AI hardware universe

Before you cast Nvidia aside for a shiny, new stock, it's important to take a quick look at why Nvidia has become the most valuable company in the world.

First, it dominates the graphics processing unit (GPU) market, thanks to its near-ubiquity in AI data centers. The latest data shows that Nvidia holds a phenomenal 86% of the AI data center market by revenue. Its competitors can only dream of that level of dominance.

Second, it's still investing in new tech to keep itself at the top. Nvidia recently released its new Vera Rubin AI platform, which it says delivers 10x higher inference throughput per megawatt than its Blackwell processor platform at just one-tenth the token cost. And CEO Jensen Huang said recently demand for Vera Rubin and Blackwell will lead to $1 trillion in orders through next year.

Nvidia is benefiting right now from the investments it made in superior processors years ago. And companies are still clamoring for its tech, as Huang's estimates suggest. With tech leaders including Alphabet, Meta Platforms, Amazon, Microsoft, and others on track to spend hundreds of billions of dollars this year alone in data center investments, Nvidia's growth likely hasn't peaked.

The case for catching Cerebras' rising star

Having said all that, disruption is the name of the game in tech. New, innovative companies come along all the time and try to unseat the dominant ones. They're not always successful, but when they are, investors can win big.

No one knows if Cerebras will become the next leading AI processor company, but it's sure as heck trying. The company's flagship product is its Wafer Scale Engine 3 (WSE-3), which is essentially a very large semiconductor that acts as one big chip, instead of hundreds of smaller ones.

Cerebras says the bigger silicon wafer gives it an advantage over Nvidia's B200 package (which contains two processors), achieving 250 times more on-chip memory, and 2,625 times more memory bandwidth.

Speed and efficiency are the name of the game for AI right now, and some leading artificial intelligence companies are already buying into Cerebras' claims. OpenAI signed a $20 billion deal with Cerebras for a multiyear compute capacity agreement, securing up to 750 megawatts of specialized AI infrastructure power and giving OpenAI a potential 11% equity stake in the chipmaker. OpenAI CEO Sam Altman was also an early investor in Cerebras.

Clearly, Cerebras is on to something with its tech. Faster AI and big tie-ins with leading artificial intelligence companies shouldn't be dismissed.

Verdict: Stick with Nvidia for now, but add Cerebras to your watch list

This might not be the outcome you wanted, but Nvidia is still the smarter AI play right now. What's the reason? I've got four.

As in, Nvidia has more than 4 times Cerebras' annual revenue. Nvidia had $216 billion in sales in its most recently completed year, compared to just $500 million for Cerebras. Oh, and Nvidia had about $117 billion in non-GAAP (adjusted) net income for the full fiscal year, compared to Cerebras' non-GAAP net loss of $75 million in 2025.

In short, Nvidia generates far more revenue, is much more profitable, and is the reigning GPU market leader. Cerebras may have good tech, but as an investment right now, it's still a very risky bet.

I understand why you might be getting hyped up about Cerebras and the idea of it unseating Nvidia in the AI semiconductor space. By all means, keep an eye on Cerebras. But if you're buying an AI stock today, Nvidia should be your pick.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.