Amid this year's chaotic macroeconomic environment, many businesses face uncertain sales outlooks. Yet one sector that's showing resilience is artificial intelligence (AI). Two examples of this are CoreWeave (CRWV +1.57%) and C3.ai (AI +0.34%).
Insatiable customer demand for AI has driven strong year-over-year sales growth at both companies. This is despite the ongoing saga of President Donald Trump's tariffs and trade wars.
Both might appeal to some investors, but if you had to choose just one to add to your portfolio now, would CoreWeave or C3.ai be the better AI stock to buy?
Image source: Getty Images.
Diving into CoreWeave
CoreWeave sells computing power to businesses that are developing AI systems. It operates more than 30 cloud computing data centers that house the types of hardware needed to train and power sophisticated AI models.
Demand for that sort of computing power has gotten so hot that ChatGPT creator OpenAI changed its exclusive deal with Microsoft this year so it can lease more from others, including CoreWeave, and even Alphabet-owned Google Cloud.
The OpenAI example illustrates the kind of AI demand CoreWeave benefits from. Its customers include a who's who of AI hyperscalers, including Microsoft, IBM, and Facebook parent Meta Platforms.
With so many top hyperscalers flocking to CoreWeave, its first-quarter revenue surged by 420% year over year to $981.6 million. And in Q2, management is guiding for it to hit $1.1 billion in sales, up from $395 million in the prior-year period.
However, CoreWeave is not profitable, and it has accrued substantial debt in the course of building out its AI data centers. In Q1, its operating expenses were $1.01 billion, which resulted in an operating loss of $27.5 million.
CoreWeave's debts loom over its balance sheet. Its total assets of $21.9 billion as of the end of Q1 were not much of a cushion against its total liabilities of $18.8 billion, including $8.7 billion in debt. The company will have to continue investing in its infrastructure to keep pace with its customers' needs, so that debt load could grow over time.
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A look at C3.ai
While CoreWeave's business revolves around artificial intelligence hardware, C3.ai focuses on AI software for enterprise customers. It went public in 2020 and has built up a substantial business in the intervening years.
For instance, C3.ai's revenue totaled $156.7 million in its fiscal 2020 (which ended April 30, 2020). By its fiscal 2025, its sales had grown to $389.1 million, which was a healthy 25% increase from its fiscal 2024 result.
And despite the current macroeconomic turmoil, management is forecasting that its sales will continue growing in the new fiscal year. The company expects fiscal 2026 revenue to land in the $447.5 million to $484.5 million range.
C3.ai's artificial intelligence capabilities apply to a wide range of use cases, from proactively monitoring aircraft maintenance needs for the U.S. Air Force to automatically transcribing and indexing archival content for the University of Southern California. Its customers include the U.S. Army, the Department of Defense, ExxonMobil, Boston Scientific, and Rolls-Royce.
The need for AI enterprise software is so great that C3.ai enlisted a network of partners to help capture this demand. Its partnerships encompass Amazon Web Services, energy giant Baker Hughes, and Microsoft Azure, which "acknowledge that the C3 enterprise AI applications are their preferred AI solutions," according to CEO Tom Siebel.
But like CoreWeave, C3.ai is not profitable. In its fiscal 2025, it booked a net loss of $288.7 million.
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Deciding between CoreWeave and C3.ai
While neither CoreWeave nor C3.ai are profitable, it's common for high-growth tech companies to spend years prioritizing business expansion and the pursuit of top-line growth over near-term profits. Amazon, for example, famously ran at a loss for many years. Both of these companies expect their sales to continue increasing, so their lack of profitability should not be an overriding concern at this point.
But given that, which factors should investors focus on in their effort to determine which would be a better AI investment today? One natural stock valuation metric to weigh heavily is the price-to-sales (P/S) ratio, which measures how much investors are paying for every dollar of a company's revenue.
Data by YCharts.
CoreWeave's valuation has surged to a lofty level this year while C3.ai's P/S multiple has remained far more reasonable. In fact, C3.ai shares look undervalued, especially considering that the P/S ratios of AI leaders Nvidia and Microsoft were hovering around 24 and 13, respectively, as of the end of last week.
Given the combination of CoreWeave's debt and its high valuation, it would be prudent for investors to wait and see how the company's financials evolve over the next few quarters before making a decision about the stock. After all, CoreWeave's Q1 earnings report was its first one since it went public in March.
Meanwhile, C3.ai's finances are solid. At the end of its fiscal Q4, its balance sheet sported total assets of $1 billion compared to total liabilities of $187.6 million. This, its growing business, and its attractive valuation make C3.ai the better AI investment for the long term.
