Broadcom vs Cerebras

Broadcom is already the AI build‑out's profit machine; Cerebras is a $46B bet that OpenAI takes delivery on schedule.

• Same growth rate, 160x the base: Broadcom grows at a 68% operating margin; Cerebras is still buying its growth with IPO cash.
• Cerebras trades at 67x trailing sales because $25B of OpenAI backlog is contracted; only a fifth of it lands within two years.
• Both are concentrated, differently: Broadcom across six accelerator programs with $179B contracted, Cerebras on OpenAI and a single Abu Dhabi customer.

Broadcom books Cerebras's whole quarter every 13 hours.

The market-value gap (38x) is far narrower than the revenue gap (130x): Cerebras is priced on its $25B contracted backlog, not on what it has billed. Broadcom's software segment alone bills 48x Cerebras's quarterly revenue, and it is the slower half of the company.

Both are near-doubling; Broadcom does it on a base 160x larger.

Broadcom's growth is AI accelerators: $16.7B in the quarter, up 221%, now 56% of revenue, with the Q4 guide calling for $21.7B. Cerebras's growth has rotated from lumpy system sales to cloud capacity, up 281% to 70% of revenue, and management guides 2027 revenue to more than triple as OpenAI tranches go live.

Broadcom keeps 46 cents of every dollar as free cash; Cerebras loses 16 cents on its own core basis and $2.65 by GAAP.

Cerebras's Q2 GAAP loss is mostly a one-off: $377M of stock compensation vested at the IPO. Underneath, core gross margin is 41% against a management target above 60%. Broadcom's shift toward XPUs trims gross margin, 75% now and 73% guided, but operating margin keeps rising because software, 30% of revenue, runs at 84%.

Broadcom owes $35B and earns it back within a year; Cerebras holds $7.7B net and is spending it on data centers.

Cerebras burned $596M in the first half and signed $1.5B of data-center leases that have not started, so the IPO cash is runway for the OpenAI build-out, not a cushion. Broadcom's debt is the VMware deal; it shrinks $5B+ a quarter while the company still pays a $2.60 dividend.

Cerebras costs 3.5x more per dollar of trailing sales; on 2027 estimates the gap nearly closes.

The Street's 2027 revenue lines do the work: both stocks discount a near-tripling, Cerebras's arriving from one contract, Broadcom's from four customers' capex. Broadcom at 21x forward earnings is priced as a growth stock with a 46% free-cash-flow margin; Cerebras has no earnings to multiply until core margins turn positive, which consensus puts in 2027.

Both live on a handful of buyers: Broadcom on six accelerator programs, Cerebras on OpenAI and one Abu Dhabi university.

Cerebras's concentration rotates rather than dissolves: G42 was 85% of 2024 revenue, its affiliate MBZUAI 62% of 2025, and OpenAI went from 9% to 32% of revenue in one quarter. Broadcom's top five customers climbed from 40% to 55% of revenue in a year, but each program is a multi-year design win; the risk is a paused program or a second source, not a lost one.

Nine in ten analysts say buy on both names; the market has taken 27% off Broadcom and 50% off Cerebras from their highs.

Cerebras has fallen after both of its reports (−19.6%, −11.9%) despite beating its own guidance, as the Street reprices when OpenAI revenue lands. Broadcom has dropped after three of its last four reports, including 12.6% in June, with EPS beats each time.

What would change the read.

• 01Cerebras core gross margin: 41% now, 60%+ is the management target.
• 02OpenAI tranche deliveries, the only thing that moves the $25.4B backlog into revenue.
• 03Broadcom's Q4 gross margin, guided to 73% as XPUs take the mix.
• 04Cerebras lock-ups release through Nov 9, with insiders already selling.