Nvidia (NVDA +4.08%) and Cerebras Systems (CBRS 0.40%) both offer something in great need right now: the high-powered compute to fuel artificial intelligence (AI) workloads. Nvidia is the better-known of the two, having been in the chip space for more than 30 years, and today dominates the AI chip market. Cerebras is an exciting new player with a very powerful chip.
Both of these companies could make an interesting investment, and they have seen their shares decline from highs in recent times. This presents a potential buying opportunity. But which is the better discount AI buy right now? Let’s find out.
Image source: Getty Images.
The case for Nvidia
Nvidia hardly needs an introduction these days. The company has made headlines since the start of the AI boom as its comments set the tone for what happens next in this market. Nvidia designs the world’s most sought-after graphics processing units (GPUs), the key chips needed to power essential tasks like the training and inference of models.
The company was first to enter this market and has made innovation a focus — that’s helped it stay ahead of rivals. In fact, Nvidia updates its GPUs on an annual basis, and the next update is right around the corner. The company aims to ship its Vera Rubin platform later this year, and it will offer an important new product: the stand-alone central processing unit (CPU).
Today’s Change
(4.08%) $8.31
Current Price
$211.84
Key Data Points
Market Cap
Day’s Range
$203.80 – $212.53
52wk Range
$164.07 – $236.54
Volume
4.9K
Avg Vol
158.1M
Gross Margin
74.15%
Dividend Yield
0.13%
This opens up a new $200 billion market to Nvidia, and the company plans on conquering it. In its latest earnings report, it predicted $20 billion in stand-alone CPU sales this year and said it was on track to dominate this market.
Meanwhile, Nvidia has proven its strength over time, and in recent years has delivered quarter after quarter of double- or triple-digit earnings gains. And earnings have reached record levels amid this AI boom. All of this is likely to continue, considering the sustained level of demand and the idea that AI is in its early days of real-world use.
The case for Cerebras
Cerebras may not be a household name like Nvidia, but the company’s technology might quickly put it on the radar screens of many investors. This player has designed a giant chip, its wafer-scale engine (WSE), that it says delivers speeds faster than today’s GPUs. How has Cerebras accomplished this? By making the WSE 58 times larger than Nvidia’s B200 chip.
Cerebras says that this size allows it to offer massive compute and memory bandwidth, and this results in tremendous speed. The company says that in inference, or the thinking AI goes through to solve a problem, it’s delivered answers 15 times faster than today’s top-selling GPUs. This has translated into growth for Cerebras, with first-quarter revenue soaring 92% to $193 million. And the company recently signed key deals with OpenAI for compute and with Amazon‘s cloud unit to make its WSE systems more broadly available. So this could be a major transition point for Cerebras, as more potential customers discover its chips and give them a try.
Today’s Change
(-0.40%) $-0.81
Current Price
$203.81
Key Data Points
Market Cap
Day’s Range
$187.15 – $208.44
52wk Range
$160.81 – $386.34
Volume
22.9K
Avg Vol
7.9M
Gross Margin
41.98%
It’s important to note that, considering the high level of demand for compute, Cerebras doesn’t have to unseat Nvidia in order to be highly successful and deliver strong growth. Analysts predict the AI market will reach beyond $3 trillion in the early part of the next decade, and this should create a strong revenue opportunity for many chip players.
This young company, founded in 2015, went public in May, raising $5.5 billion in the biggest IPO of 2025 — until Space Exploration Technologies launched its operation in June, for the largest IPO ever.
The market leader or the young challenger?
Cerebras isn’t yet profitable, which isn’t surprising at this stage of its growth story, but this adds to risk. The stock has slid 30% from its first day of trading, offering an interesting buying opportunity for aggressive investors.
But for most investors, I consider Nvidia the best discount AI buy today. The AI giant is trading at 23x forward earnings estimates, which looks like a steal considering all of the company’s strengths.
Leave a comment