Cloud artificial intelligence (AI) infrastructure provider CoreWeave (CRWV 11.40%) witnessed a stunning increase in its stock price since going public just over five months ago. Shares of the company shot up a remarkable 133% since then, though the recent action suggests that investors have been booking profits following its phenomenal rise.
Specifically, the stock has slipped 50% from the 52-week high it hit on June 20. CoreWeave's recent slip can be attributed to a combination of its planned all-stock acquisition of Core Scientific, its recent quarterly results in which the company delivered a bigger-than-expected loss, and the expiration of the post-IPO (initial public offering) lock-up period, which allowed insiders to sell the stock.
However, this recent decline is an opportunity in disguise for savvy investors looking to buy a growth stock at a relatively cheap valuation, especially considering the terrific growth CoreWeave could clock over the next five years.
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CoreWeave is going to win big from booming AI infrastructure demand
CoreWeave's business is growing at an incredible pace. The company built data centers powered by top-of-the-line graphics processing units (GPUs) from Nvidia, and customers have been rushing to rent that capacity from CoreWeave.
NASDAQ: CRWV
Key Data Points
This explains why CoreWeave's revenue in the first six months of 2025 jumped 3.75 times from the same period last year. An important thing to note here is that CoreWeave doesn't have enough capacity at its disposal to fulfill all the business that it is receiving. This is evident from the massive backlog of $30 billion that it was sitting on at the end of Q2.
CoreWeave's backlog grew by a massive $14 billion year over year in the previous quarter. That's way higher than the company's Q2 revenue of $1.2 billion. So CoreWeave is winning new contracts far faster than it is fulfilling them. That's not surprising when we consider that the global cloud infrastructure-as-a-service (IaaS) market's revenue is expected to jump from an estimated $190 billion in 2025 to more than $712 billion in 2032, according to Fortune Business Insights.
So companies looking to develop and deploy AI applications are getting their hands on whatever data center capacity they can. CoreWeave, in turn, is doing its best to bring more data center capacity online. CEO Michael Intrator pointed out on the recent earnings conference call that "scaling our capacity and services remains [a] key ingredient for our success in this structurally undersupplied market."
As a result, CoreWeave is intent on increasing its active power capacity to 900 megawatts by the end of 2025, up from 470 at the end of the previous quarter. What's more, CoreWeave points out that it increased its total contracted power capacity to 2.2 gigawatts at the end of the previous quarter.
Contracted capacity is the amount of power that CoreWeave secured for powering its data centers in the future. It can turn that into active capacity by deploying more equipment, such as graphics cards and storage, which should allow it to fulfill more contracts. It's worth noting that CoreWeave has been able to get its hands on the latest and greatest hardware from the world's leading AI chip company.
The company pointed out a couple of months ago that it will be the first AI cloud infrastructure company to offer Nvidia's flagship GB300 NVL72 system. According to CoreWeave, this system offers "a staggering 50 times increase in output for reasoning model inference, empowering you to develop and deploy larger, more complex AI models that are exponentially faster than ever before" as compared to previous-generation Hopper chips.
That's not surprising, as the Blackwell Ultra GPU powering this chip platform has 1.5 times more computing power than the regular Blackwell card. CoreWeave could continue attracting more customers and grab a bigger share of the IaaS market over the next five years thanks to its ability to offer flagship AI chip systems and its aggressive focus on capacity expansion.
The stock's capable of delivering terrific gains over the next five years
Analysts are expecting terrific growth from CoreWeave for the next couple of years, and they have even increased their growth expectations for the company.
CRWV Revenue Estimates for Current Fiscal Year data by YCharts
CoreWeave already has a big enough backlog to meet its revenue targets for the next three years. On top of that, the sizable addressable opportunity in the AI infrastructure market should help the company sustain its solid growth beyond 2028. But even if CoreWeave's growth slows down and its top line jumps at a relatively conservative rate of 20% in 2029 and 2030, its revenue could hit almost $25 billion after five years.
Assuming CoreWeave is trading at 5 times sales in 2030, in line with the Nasdaq Composite index's price-to-sales ratio, its market cap could jump to $125 billion. That would be almost 2.75 times its current market cap, suggesting that this AI stock's recent dip is a buying opportunity, as it could clock terrific gains in the next five years.
