C3.ai (AI 0.34%) and CoreWeave (CRWV 2.27%) are both poised to profit from the expansion of the artificial intelligence (AI) market. C3 develops AI algorithms and standalone modules that can be plugged into an organization's existing software infrastructure. CoreWeave's data centers provide cloud-based GPUs for processing AI tasks.
C3 went public at $42 in December 2020, but it now trades at around $25. CoreWeave went public in March 2025 at $40, and it now trades at about $160. Let's see why the bulls embraced CoreWeave while shunning C3 -- and if the former remains a better buy than the latter.
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Why didn't C3 impress the market?
C3's revenue only rose 6% in fiscal 2023 (which ended in April 2023) as it grappled with tougher macro headwinds, faced intense competition in the AI space, and cannibalized some of its own subscriptions with its new consumption-based fees. It also faced an uncertain future as its joint venture with energy giant Baker Hughes, which regularly accounted for around 30% of its revenue, was set to expire at the end of fiscal 2025. All of those headwinds -- along with its declining gross margin and persistent losses -- drove away the bulls. Rising interest rates further compressed its valuations.
NYSE: AI
Key Data Points
However, C3's revenue grew 16% in fiscal 2024 and 25% in fiscal 2025. That acceleration was sparked by its new generative AI modules, more federal contracts, and its strategic partnerships with Microsoft, Amazon, and McKinsey. It also recently renewed its joint venture with Baker Hughes for another three years. It expects its revenue to rise 15% to 25% in fiscal 2026, while analysts anticipate 19% growth.
From fiscal 2025 to fiscal 2028, analysts expect C3's revenue to grow at a compound annual growth rate (CAGR) of 22%. It looks reasonably valued at 7.5 times this year's sales, but it won't break even anytime soon. In fiscal 2024, it abandoned its goal of turning profitable (on an adjusted basis) in favor of ramping up its investments in its generative AI modules.
While C3 is still growing, it hasn't proven its business model is sustainable yet. Its insiders also sold more than twice as many shares as they bought over the past 12 months, and that chilly insider sentiment suggests its upside potential is limited.
Why did CoreWeave's stock blast off?
CoreWeave was originally an Ethereum mining company, but it repurposed its mining GPUs to process AI tasks after the cryptocurrency crash of 2018. It subsequently opened more data centers, spent $100 million on Nvidia's H100 GPUs in 2022, and served up its processing power remotely through its cloud-based platform. It also leveraged its GPUs as collateral to secure more funding and scale up its business. It claims its dedicated cloud-based GPUs can process AI tasks roughly 35 times faster at 80% lower prices than traditional cloud platforms.
NASDAQ: CRWV
Key Data Points
CoreWeave currently operates 33 data centers across the U.S. and Europe, up from just three centers at the end of 2022. It achieved that expansion with some big investments from Nvidia, Cisco, and PureStorage, and its top customers now include AI leaders like Microsoft and OpenAI.
From 2022 to 2024, its annual revenue soared from $16 million to $1.9 billion -- but its net loss widened from $31 million to $863 million as it opened more data centers, bought more GPUs, and grappled with higher energy costs. From 2024 to 2027, analysts expect its revenue to grow at a CAGR of 105% to $16.6 billion as it turns profitable in the final year. CoreWeave's stock still seems reasonably valued (but not cheap) relative to that growth trajectory at 16 times this year's sales.
But most of its expansion was funded by big debt offerings, and it ended its latest quarter with an alarmingly high debt-to-equity ratio of 9.9. However, its insiders bought 19 times as many shares as they sold over the past 12 months -- and that confidence suggests it could successfully scale up its business and narrow its losses.
The better buy: CoreWeave
C3.ai and CoreWeave are both still speculative AI plays. But if I had to pick one, I'd stick with CoreWeave because it's growing faster with a clearer path toward profitability than C3. C3 might keep expanding, but I'm not confident it can stabilize its business while staying ahead of its competitors in the crowded enterprise AI software market.
