Growth stocks have been all over the map this year. Despite bullish projections from analysts heading into 2025, President Donald Trump's global trade reset has weighed on markets: After several ups and downs, the benchmark S&P 500 is essentially flat year to date at the time of this writing.
However, against that backdrop, some stocks have delivered incredible gains. CoreWeave (CRWV -5.39%), which is up 200% year to date, is a prime example. The artificial intelligence (AI) infrastructure powerhouse has defied gravity amid the market's turbulence, and appears primed for even more gains in the years ahead.
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AI infrastructure's revenue rocket
CoreWeave is a specialized cloud computing provider that operates GPU-accelerated data centers designed specifically for AI workloads. With more than 33 facilities across the U.S. and Europe, it provides the specific variety of computational horsepower needed to power a host of AI-related needs, from training large language models to supporting generative AI applications. Unlike traditional cloud providers that are now retrofitting existing infrastructure to meet the new demands of their customers, CoreWeave builds its data centers from the ground up for AI computing.
Earlier this month, the company delivered blockbuster first-quarter results that sent Wall Street analysts scrambling to raise their price targets on the stock. Revenue rose 420% year over year to $981.6 million, crushing the consensus expectation of $853 million. The quarter's highlight was a five-year, $11.9 billion contract with OpenAI that cemented CoreWeave's status as the go-to infrastructure provider for leading AI companies.
What makes CoreWeave's growth particularly compelling is its massive $25.9 billion revenue backlog, which includes $14.7 billion in remaining performance obligations. Further showcasing the company's hypergrowth, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged to $606 million, nearly six times greater than in the prior-year period. With 420 megawatts (MW) powering its data centers across the U.S. and Europe, the company has the physical infrastructure to support years of double-digit percentage growth.
Scaling at the speed of AI
CoreWeave's ability to secure long-term contracts with blue chip AI customers provides it with exceptional revenue visibility. This enables the company to make infrastructure investments backed by firm customer commitments, reducing execution risk. In Q1, CoreWeave added a substantial amount of contracted power, including a 260 MW expansion with Galaxy Digital. Additional partnerships, such as with Bulk Infrastructure in Europe and Flexential in Q2, underscore the company's accelerating scale.
CoreWeave's competitive advantage stems from its purpose-built approach. Traditional cloud providers like Amazon Web Services or Microsoft Azure retrofit existing data centers for AI workloads. CoreWeave's facilities are designed specifically for GPU-intensive computing, and deliver superior performance and cost efficiency as AI models grow more complex and computationally demanding. That's a significant competitive advantage in a rapidly growing market.
High stakes, high rewards, high risks
While CoreWeave's growth has been mind-bending, investors should still consider the significant risks it faces. The company posted a net loss of $314.6 million in Q1, widening from $129.2 million a year earlier, an increase attributable to interest expenses that rose 549% year over year to $264 million.
These financing costs reflect the capital-intensive nature of building cutting-edge data centers. Management is guiding for capital expenditures of $20 billion to $23 billion in 2025 alone. To put this in perspective, CoreWeave is spending roughly five times its annual revenue on its infrastructure build-out.
Customer concentration presents another risk -- Microsoft alone accounted for 62% of 2024 revenue. While the OpenAI deal will provide some diversification, CoreWeave's dependence on its few biggest clients remains a concern. Additionally, hyperscalers could leverage their massive balance sheets to compete more aggressively with it in the AI infrastructure space.
Is CoreWeave stock still a buy?
Even after their eye-popping surge this year, CoreWeave shares still look like a compelling option for growth investors who can stomach volatility. Analysts project the company will turn profitable in 2026 while maintaining triple-digit percentage growth rates. The stock offers one of the purest plays available on AI infrastructure demand. For investors who believe we're still in the early innings of the AI revolution, CoreWeave stock remains a buy.
