Cerebras Systems vs. Nebius: Which Artificial Intelligence Stock Is a Better Buy Going into 2027?
As demand for artificial intelligence reshapes the global economy, choosing between hardware innovators and cloud infrastructure providers is a difficult task. Is Cerebras Systems (CBRS +9.75%) or Nebius Group (NBIS +7.58%) the better buy?
Cerebras Systems focuses on massive wafer-scale processors to accelerate AI model training, while Nebius provides a cloud platform specifically designed for the AI lifecycle. Both companies are scaling rapidly to capture market share in the booming AI sector, but they approach the opportunity from different angles within the technology stack.
The case for Cerebras Systems
Cerebras Systems designs specialized artificial intelligence computing systems built around its massive wafer-scale chips. By manufacturing a single processor that covers nearly an entire silicon wafer, the company aims to provide significantly more speed for AI inference and training, giving it a competitive advantage among semiconductor stocks. As organizations prioritize speed, Cerebras Systems delivers its technology through hardware sales and cloud service offerings to global clients.
In its latest annual report, filed for its 2025 fiscal year (FY), revenue reached nearly $510.0 million, representing a growth rate of 75.7% over the prior year. This rapid expansion helped the company achieve a net income of $237.8 million, resulting in a net margin of 46.6%. This performance marks a significant improvement from the previous fiscal year, when the company reported a substantial net loss of $481.6 million, suggesting a turnaround as adoption of its chips increases.
As of its December 2025 balance sheet, the debt-to-equity ratio was -0.5x, meaning total liabilities exceed shareholder equity. The current ratio, measuring the ability to cover short-term obligations, was 2.1x. Free cash flow, which is cash from operations minus capital expenditures, was a negative $392.8 million for the fiscal period.
The case for Nebius
Nebius Group operates as an AI cloud company, providing a unified platform that handles the entire lifecycle of data and model training. The company targets diverse industries such as healthcare, financial services, and media, offering computing infrastructure for production runtime and deployment. As organizations look for specialized hardware and cloud resources, Nebius positions itself as a primary provider for physical AI and robotics start-ups globally.
In its latest annual report, filed for FY 2025, the company saw its revenue climb to $529.8 million, which was a massive increase of 479% compared to the previous year. This explosive top-line growth translated into a net income of $82.5 million and a net margin of 15.6%. The company has successfully shifted from a period of heavy losses to positive net income as its cloud platform gains traction.
As of its December 2025 balance sheet, the debt-to-equity ratio was 1.1x, while the current ratio was 3.1x. Free cash flow, calculated as cash from operations minus capital expenditures, was a negative $3.7 billion. Note that stock-based compensation (SBC) represented 21.6% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
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NBIS & CBRS: Performance Comparison
Key Financial Metrics
NBIS – Nebius Group
$129.49
+7.58% (+$9.12)
CBRS – Cerebras Systems
$89.68
+9.75% (+$7.97)
Market Cap
$33B
52wk Range
$73.52 – $299.86
Gross Margin
18.81%
P/E Ratio
455.26
EPS (TTM)
-$0.13
Market Cap
$19B
52wk Range
$77.84 – $386.34
Gross Margin
39.00%
P/E Ratio
-36.18
EPS (TTM)
-$2.26
NBIS – Nebius Group
$129.49
+7.58% (+$9.12)
Market Cap
$33B
52wk Range
$73.52 – $299.86
Gross Margin
18.81%
P/E Ratio
455.26
EPS (TTM)
-$0.13
CBRS – Cerebras Systems
$89.68
+9.75% (+$7.97)
Market Cap
$19B
52wk Range
$77.84 – $386.34
Gross Margin
39.00%
P/E Ratio
-36.18
EPS (TTM)
-$2.26
Risk profile comparison
Cerebras Systems faces significant risks related to the intense competition in the high-performance computing market. The company must continue to innovate rapidly to maintain its performance edge over established giants with vastly larger research budgets. Furthermore, its reliance on a unique wafer-scale architecture creates technical and manufacturing complexities that could lead to potential supply chain disruptions if production yields do not meet expectations.
Nebius Group operates in a capital-intensive industry where building and maintaining data centers requires massive ongoing investment. The company competes against the largest cloud providers in the world, many of whom have deeper enterprise relationships and broader service portfolios. Additionally, the rapid pace of change in artificial intelligence software could make current platform offerings obsolete if the company fails to adapt to new model architectures.
Valuation comparison
Nebius Group appears more attractively priced because its Forward P/E, which compares the price to future earnings estimates, and its P/S ratio, measuring price against sales over the past twelve months, are lower than those of Cerebras Systems.
MetricCerebras SystemsNebiusForward P/E81.7×24.5xP/S ratio29.2×26.1x
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy for 2027?
Deciding between Cerebras Systems and Nebius Group to gain exposure to the AI sector is a challenge, since each has unique strengths and weaknesses. While I like both companies, my pick to buy is Cerebras Systems.
Cerebras’ proprietary wafer-scale chip technology makes it stand out against a sea of semiconductor competitors. Rivals produce smaller wafers and link them together with wires and cables. This creates bottlenecks for AI systems. By producing one giant wafer, Cerebras eliminates this slowdown, making its product superior for AI data processing.
Competition creates smaller wafers because manufacturing defects are inevitable. Throwing away defective small wafers is not as costly as a single one the size that Cerebras produces, which would amount to a multi-million dollar loss per wafer. Cerebras has created a closely-guarded manufacturing and defect management process that avoids the need to discard defective wafers, circumventing the issue.
Validation of its product came when Cerebras partnered with OpenAI in a deal valued at over $20 billion. Now, Cerebras must continue to gain customers, which it appears to be doing. On Oct. 27, the company announced Oracle as a client. I think it can gain more customers going into 2027. That’s why I bought the stock.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.