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CBRS vs. AVGO: Which Stock Leads the AI Infrastructure Boom?
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Key Takeaways
Broadcom leads on scale, diversification, revenue visibility and a lower forward sales valuation.
AI semiconductor bookings topped $30B, with major customer commitments extending through 2028.
Cerebras posted 94% revenue growth but remains unprofitable, concentrated and capital-intensive.
Cerebras Systems (CBRS - Free Report) and Broadcom (AVGO - Free Report) are beneficiaries of the AI infrastructure boom. Cerebras develops proprietary AI processors and complete AI computing systems, while Broadcom is a diversified semiconductor company with a dominant position in custom AI accelerators (XPUs), networking silicon and infrastructure software.
So, Cerebras or Broadcom, which has an edge now?
The Case for CBRS Stock
Cerebras is a high-growth, specialized AI-compute company focused on wafer-scale processors and ultra-fast inference. The company’s differentiated wafer-scale architecture delivers inference speeds more than an order of magnitude faster than conventional GPUs for certain workloads. Partnerships with OpenAI and Amazon Web Services (AWS) further validate the company’s technology and expand its long-term growth opportunity. CBRS delivered impressive first-quarter 2026 growth with revenues surging 94% year over year to $193.4 million, driven by a 59% increase in hardware revenues and a 178% jump in cloud and other services revenues.
Cerebras’ partnerships with OpenAI and AWS are important competitive endorsements. The company’s OpenAI agreement covers 750 megawatts of inference capacity and is valued at more than $20 billion over several years. The AWS partnership could broaden access to enterprise customers by deploying Cerebras systems within AWS data centers. Nevertheless, CBRS remains dependent on a relatively limited group of customers, including OpenAI, G42, MBZUAI and AWS, which is a concern for investors.
However, Cerebras is not yet profitable and is expected to suffer from higher spending. The company reported a GAAP operating loss of $15 million and a net loss of $14 million in the first quarter of 2026. Although CBRS’ core operating loss narrowed to $3.5 million, it expects profitability to deteriorate as it invests heavily in data-center infrastructure. For the second quarter of 2026, Cerebras expects gross margin to decline to 36-38% in the second quarter from 47% in the first quarter due to rented infrastructure and accelerated cloud-capacity deployment.
The Case for AVGO Stock
Broadcom has been benefiting from rising AI revenues, driven by strong demand for XPUs despite lower margins on the chips that are hurting the revenue mix. AI semiconductor revenues reached a record $10.8 billion in the fiscal second quarter, suggesting a 143% year-over-year surge. Management expects it to rise to $16 billion in the fiscal third quarter, indicating more than 200% year-over-year growth.
AVGO management disclosed that AI semiconductor bookings exceeded $30 billion during the fiscal second quarter, nearly three times quarterly AI shipments. CEO Hock Tan stated that visibility now extends through 2028, supported by commitments from major customers including Google, OpenAI, Anthropic and Meta Platforms. Remaining Performance Obligations reached $164.6 billion, including commitments under new custom AI accelerator contracts. These agreements provide exceptional long-term revenue visibility.
Broadcom is not only supplying custom AI accelerators but also dominates AI networking with Tomahawk 6 Ethernet switches, Jericho fabric solutions, co-packaged optics and industry-leading SerDes technology. Networking represented almost 40% of AI semiconductor revenues in the fiscal second quarter, expanding the company's content per AI cluster.
However, Broadcom has guided for the gross margin to decline to 74% in the third quarter of fiscal 2026 from 77.1% in the fiscal second quarter due to a greater mix of lower-margin AI semiconductor revenues, raising concerns that profitability may not scale as quickly as revenues. AVGO expects its consolidated operating margin to remain around 67% in the fiscal third quarter despite a significant increase in the semiconductor revenue mix.
AVGO’s Earnings Estimate Revisions Go North, CBRS Loss Improves
The Zacks Consensus Estimate for AVGO’s fiscal 2026 earnings is pegged at $11.74 per share, up by a penny over the past 30 days, indicating a 72.14% increase over 2025’s reported figure.
Broadcom shares have outperformed Cerebras in the past month. While AVGO shares have returned 3.9%, CBRS has jumped 15.1%.
AVGO vs. CBRS Stock Performance
Image Source: Zacks Investment Research
Both Broadcom and Cerebras are overvalued, as suggested by the Value Score of D.
In terms of forward 12-month price/sales, Broadcom shares are trading at 12.14X, lower than Cerebras’ 24.62X.
AVGO and CBRS Valuation
Image Source: Zacks Investment Research
Conclusion
Broadcom appears to be the stronger choice for investors seeking a more balanced risk-reward profile. While Cerebras offers compelling long-term upside through its differentiated AI architecture and high-growth partnerships, its business remains concentrated, capital intensive and unprofitable. Broadcom, by contrast, combines explosive AI growth with a diversified business model, strong cash generation, unmatched customer commitments extending through 2028 and a more reasonable valuation relative to Cerebras. Although margin pressure from AI chip mix remains a near-term headwind, Broadcom's scale, broad AI portfolio and long-term revenue visibility make it the more attractive AI infrastructure investment at current levels.
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Image: Bigstock
CBRS vs. AVGO: Which Stock Leads the AI Infrastructure Boom?
Key Takeaways
Cerebras Systems (CBRS - Free Report) and Broadcom (AVGO - Free Report) are beneficiaries of the AI infrastructure boom. Cerebras develops proprietary AI processors and complete AI computing systems, while Broadcom is a diversified semiconductor company with a dominant position in custom AI accelerators (XPUs), networking silicon and infrastructure software.
So, Cerebras or Broadcom, which has an edge now?
The Case for CBRS Stock
Cerebras is a high-growth, specialized AI-compute company focused on wafer-scale processors and ultra-fast inference. The company’s differentiated wafer-scale architecture delivers inference speeds more than an order of magnitude faster than conventional GPUs for certain workloads. Partnerships with OpenAI and Amazon Web Services (AWS) further validate the company’s technology and expand its long-term growth opportunity. CBRS delivered impressive first-quarter 2026 growth with revenues surging 94% year over year to $193.4 million, driven by a 59% increase in hardware revenues and a 178% jump in cloud and other services revenues.
Cerebras’ partnerships with OpenAI and AWS are important competitive endorsements. The company’s OpenAI agreement covers 750 megawatts of inference capacity and is valued at more than $20 billion over several years. The AWS partnership could broaden access to enterprise customers by deploying Cerebras systems within AWS data centers. Nevertheless, CBRS remains dependent on a relatively limited group of customers, including OpenAI, G42, MBZUAI and AWS, which is a concern for investors.
However, Cerebras is not yet profitable and is expected to suffer from higher spending. The company reported a GAAP operating loss of $15 million and a net loss of $14 million in the first quarter of 2026. Although CBRS’ core operating loss narrowed to $3.5 million, it expects profitability to deteriorate as it invests heavily in data-center infrastructure. For the second quarter of 2026, Cerebras expects gross margin to decline to 36-38% in the second quarter from 47% in the first quarter due to rented infrastructure and accelerated cloud-capacity deployment.
The Case for AVGO Stock
Broadcom has been benefiting from rising AI revenues, driven by strong demand for XPUs despite lower margins on the chips that are hurting the revenue mix. AI semiconductor revenues reached a record $10.8 billion in the fiscal second quarter, suggesting a 143% year-over-year surge. Management expects it to rise to $16 billion in the fiscal third quarter, indicating more than 200% year-over-year growth.
AVGO management disclosed that AI semiconductor bookings exceeded $30 billion during the fiscal second quarter, nearly three times quarterly AI shipments. CEO Hock Tan stated that visibility now extends through 2028, supported by commitments from major customers including Google, OpenAI, Anthropic and Meta Platforms. Remaining Performance Obligations reached $164.6 billion, including commitments under new custom AI accelerator contracts. These agreements provide exceptional long-term revenue visibility.
Broadcom is not only supplying custom AI accelerators but also dominates AI networking with Tomahawk 6 Ethernet switches, Jericho fabric solutions, co-packaged optics and industry-leading SerDes technology. Networking represented almost 40% of AI semiconductor revenues in the fiscal second quarter, expanding the company's content per AI cluster.
However, Broadcom has guided for the gross margin to decline to 74% in the third quarter of fiscal 2026 from 77.1% in the fiscal second quarter due to a greater mix of lower-margin AI semiconductor revenues, raising concerns that profitability may not scale as quickly as revenues. AVGO expects its consolidated operating margin to remain around 67% in the fiscal third quarter despite a significant increase in the semiconductor revenue mix.
AVGO’s Earnings Estimate Revisions Go North, CBRS Loss Improves
The Zacks Consensus Estimate for AVGO’s fiscal 2026 earnings is pegged at $11.74 per share, up by a penny over the past 30 days, indicating a 72.14% increase over 2025’s reported figure.
Broadcom Inc. Price and Consensus
Broadcom Inc. price-consensus-chart | Broadcom Inc. Quote
The consensus mark for Cerebras’ 2026 loss has improved from $1.14 per share to 89 cents per share over the past 30 days.
Cerebras Systems Inc. Price and Consensus
Cerebras Systems Inc. price-consensus-chart | Cerebras Systems Inc. Quote
AVGO and CBRS’ Performance, Valuation Details
Broadcom shares have outperformed Cerebras in the past month. While AVGO shares have returned 3.9%, CBRS has jumped 15.1%.
AVGO vs. CBRS Stock Performance
Image Source: Zacks Investment Research
Both Broadcom and Cerebras are overvalued, as suggested by the Value Score of D.
In terms of forward 12-month price/sales, Broadcom shares are trading at 12.14X, lower than Cerebras’ 24.62X.
AVGO and CBRS Valuation
Image Source: Zacks Investment Research
Conclusion
Broadcom appears to be the stronger choice for investors seeking a more balanced risk-reward profile. While Cerebras offers compelling long-term upside through its differentiated AI architecture and high-growth partnerships, its business remains concentrated, capital intensive and unprofitable. Broadcom, by contrast, combines explosive AI growth with a diversified business model, strong cash generation, unmatched customer commitments extending through 2028 and a more reasonable valuation relative to Cerebras. Although margin pressure from AI chip mix remains a near-term headwind, Broadcom's scale, broad AI portfolio and long-term revenue visibility make it the more attractive AI infrastructure investment at current levels.
Broadcom currently carries a Zacks Rank #2 (Buy), while Cerebras has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.