Navitas (NVTS +5.76%) and CoreWeave (CRWV +6.68%) represent two different ways to invest in the rapid growth of the artificial intelligence (AI) market. Navitas was recently chosen by Nvidia (NVDA 0.48%) to supply more power-efficient chips for its next-gen data centers, while CoreWeave provides cloud-based access to Nvidia's GPUs through its own data centers.
Both of these AI-oriented stocks generated big gains within a short time. Navitas' stock had sunk to a record low of $1.52 this April, but a partnership with Nvidia in May brought back the bulls. It now trades at about $6. CoreWeave went public at $40 this March, and it's already tripled to nearly $120. Should investors buy either of these stocks today?
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Navitas isn't a pure AI play
Navitas' recent data center deal with Nvidia cast a spotlight on its stock, but it doesn't actually generate most of its revenue from the AI market. It produces gallium nitride (GaN) and silicon carbide (SiC) power chips, which are faster, consume less power, and more resistant to higher temperatures than traditional silicon chips. They're well-suited for electric vehicle (EV) chargers, mobile device chargers, industrial motors, solar inverters, and data center power supplies.
NASDAQ: NVTS
Key Data Points
Navitas generates most of its revenue from GaN Power ICs, which bundle together switching, sensing, control, and security features in a single package. But in 2022, it expanded its SiC business by acquiring GeneSiC, which mainly serves the EV and data center markets.
Navitas' revenue more than doubled in 2023, but rose just 5% in 2024 as it ended a deal with a key distributor over unsold products. For 2025, analysts expect its revenue to decline 42% as ithe macro headwinds drive its core EV, solar, and industrial customers to right-size their inventories. The seasonal softness of the mobile and consumer markets is exacerbating that slowdown. It hasn't been profitable on a generally accepted accounting principles (GAAP) basis since 2022.
Navitas' biggest markets still face near-term challenges, but they're expected to stabilize next year. Its data center deal with Nvidia could eventually increase its exposure to the AI market, but Navitas doesn't expect to start mass producing those power chips until 2027. That's why analysts expect its revenue to only rise 9% in 2026 before jumping 79% to $95 million in 2027. But with a market cap of $1.2 billion, Navitas looks expensive at 24 times this year's sales. Its bottom line is also expected to stay red for the foreseeable future. Therefore, Navitas' deal with Nvidia inflated its price-to-sales ratio -- but it could struggle to grow into that premium valuation.
But CoreWeave is a pure AI play
CoreWeave was once an Ethereum (ETH +0.88%) miner, but it repurposed its entire fleet of Nvidia GPUs to remotely process AI tasks after the cryptocurrency crash of 2018. In 2022, it boldly expanded that business by investing $100 million in Nvidia's H100 GPUs, and it used those GPUs as collateral to secure additional funds to buy even more GPUs and build more data centers. That strategy impressed Nvidia, which now holds about 24.3 million shares of the company.
NASDAQ: CRWV
Key Data Points
CoreWeave runs over a quarter million GPUs across its 33 data centers in the U.S. and Europe. That's up from just three data centers at the end of 2022. Its biggest customers include Microsoft, OpenAI, and Meta Platforms -- which all remotely access its GPUs to process their demanding AI applications. It claims its dedicated cloud-based GPUs can process AI tasks about 35% faster and 80% cheaper than larger cloud infrastructure platforms like Amazon Web Services (AWS).
CoreWeave's revenue skyrocketed from $16 million in 2022 to $1.92 billion in 2024 as the generative AI market exploded. From 2024 to 2027, analysts expect its revenue to grow at a CAGR of 106% to $17.27 billion as it buys more GPUs and opens new data centers. That strategy is a capital-intensive one -- and investors should expect it to take on more debt and issue more shares as it continues to bleed red ink through 2026. But by 2027, analysts expect it to turn profitable as economies of scale to kick in. With a market cap of $60.7 billion, CoreWeave trades at 11 times this year's sales. It isn't cheap, but it looks more reasonably valued than Navitas and has clearer near-term catalysts.
The better buy: CoreWeave
Navitas and CoreWeave are both speculative stocks, and I wouldn't go all in on either one as the market hovers near its all-time highs. But if I had to pick one over the other, I'd definitely stick with CoreWeave for its stronger growth, direct exposure to the AI market, and its lower valuations. Navitas' sales might surge in 2027 as its partnership with Nvidia takes off, but those plans could still be derailed by production issues, delays, and other unpredictable factors over the next two years.
