After only a couple of months on the stock market, CoreWeave (CRWV -1.36%) already has made its mark. This is thanks to the company's close ties with artificial intelligence (AI) superpower Nvidia (NVDA -2.20%) and its own soaring levels of revenue in recent times. Investors looking for the next big AI growth story clearly have their eyes on CoreWeave.
The company's initial public offering (IPO) fell flat in its first days, but it's important to keep in mind the timing of this event. It happened in late March as investors were preoccupied by Preside Trump's tariffs on imports and their potential impact on the economy -- this weighed on indexes, and particularly on growth stocks. So, this may have hurt early demand for CoreWeave shares.
Since, though, the situation has quickly turned around. As the U.S. initiated trade talks with China -- a key country concerned by tariffs -- general market sentiment improved, and this has boosted AI stocks. Meanwhile, CoreWeave also has wowed investors with its triple-digit revenue growth. Is CoreWeave a buy today? Let's find out.
Image source: Getty Images.
CoreWeave's relationship with Nvidia
So, first let's consider CoreWeave's business and the company's relationship with Nvidia. CoreWeave's operations actually revolve around the technology of the AI superstar as it offers customers access to its huge fleet of Nvidia AI chips, known as graphics processing units (GPUs). This AI company on the rise has 250,000 GPUs across more than 30 data centers, and customers can rent access to them -- even on an hourly basis. Don't let this hourly element fool you though -- CoreWeave's contract terms generally span two to five years, offering visibility on revenue to come.
Nvidia is a clear believer in the company as it holds a 7% stake, and Nvidia has given CoreWeave priority when it comes to rolling out its latest GPUs. For example, earlier this year, CoreWeave was the first to make Nvidia's Blackwell compute power generally available. Nvidia launched its Blackwell architecture and chip in the fourth quarter of last year, and demand was high, even surpassing supply -- so CoreWeave's ability to rapidly bring this GPU to users was a big deal.
CoreWeave hasn't escaped the attention of some of the world's biggest tech companies -- names including Microsoft, Meta Platforms, and IBM have flocked to CoreWeave for access to GPUs as they ramp up their AI platforms. In fact, for the past two years, Microsoft was CoreWeave's biggest customer, representing 35% of revenue in 2023 and 62% in 2024.
Revenue soars 400%
This market position has translated into major growth for CoreWeave, as we can see in its latest earnings report. Revenue soared more than 400% to $981 million, surpassing analysts' estimates. And a look at annual growth reinforces this, with annual revenue climbing from $16 million in 2022 to $1.9 billion in 2024.
So, it looks as if CoreWeave is going strong, and analysts' forecasts of an AI market reaching into the trillions by next decade bodes well for this company's long-term prospects. CoreWeave also says that as AI training and inferencing become more widespread, its customer base should grow as well.
Now let's get back to our question: Is this AI mover a stock to buy now? It's clear CoreWeave has delivered impressive growth in recent times, and even if the pace slows somewhat, considering the potential of the AI market and demand for computing power, the company should continue to deliver. Yes, it faces bigger cloud rivals that also offer customers access to GPUs, but CoreWeave stands out as it truly specializes in this particular area. This and the depth of demand out there suggest CoreWeave and bigger cloud providers each can score a win.
Investing in CoreWeave comes with some risk
Still, it's important to keep in mind that CoreWeave isn't yet profitable and must invest heavily in GPUs serve customers' needs in a fast-changing and fast-growing market. The company's technology and infrastructure expenses increased more than 500% in the latest quarter. This represents some risk. On top of this, the stock, since its early rough period actually has soared in recent weeks -- it's now up more than 280% since its IPO.
All of this means your decision to buy depends on your investment style and strategy. If you're a cautious or value investor, CoreWeave isn't the best fit for your portfolio. But, if you're an aggressive investor who also plans on holding on for the long term, you may want to pick up a few shares of CoreWeave -- in spite of its meteoric rise, it may be in the early days of its growth story and deliver significant gains over the long term.
