Technology stocks endured a shaky start to 2025 as concerns about the heavy spending on artificial intelligence (AI) hardware, the possibility of a recession, and the uncertainty caused by tariffs dented investor confidence in the sector. However, tech stocks made a terrific comeback after a poor first quarter.
This is evident from the 32% surge in the tech-laden Nasdaq Composite index since the beginning of April. The index has clocked overall gains of 20% this year. The good news for tech investors is that the rally is likely to continue in 2026 as well. According to Ryan Detrick, the chief market strategist of financial services and investment management firm Carson Group, a bull market could stretch up to an average of eight years once it is three years old.
Detrick cites historical data going back to 1950. It is worth noting that the S&P 500 index's bull market turned three years old a couple of months ago. Therefore, there is a strong possibility that the index will continue to rise in 2026, which could have a positive impact on the broader market, including Nasdaq stocks. That's the reason why it may be a good time for investors to load up on shares of CoreWeave (CRWV +22.64%), as this Nasdaq stock has the potential to jump impressively in the new year.
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CoreWeave's outstanding growth is set to drive the stock higher in 2026
CoreWeave is a neocloud company that rents out dedicated AI data centers powered by graphics processing units (GPUs). It relies on a wide range of Nvidia's GPUs -- including Blackwell, Hopper, and even the old A100 GPU -- to offer AI computing power to customers. The company has built a wide customer base that includes Meta Platforms, Microsoft, OpenAI, Google, and many other hyperscalers and companies looking to build and deploy AI applications in the cloud.
NASDAQ: CRWV
Key Data Points
From compute to data storage to networking to managed software services, CoreWeave customers can access a wide range of AI-related services on its platform. Not surprisingly, CoreWeave is experiencing remarkable demand for its AI data center capacity, resulting in significant revenue growth. It generated $3.6 billion in revenue in the first three quarters of 2025, up from $1.17 billion in the same period last year.
It is on track to end 2025 with $5.1 billion in revenue, as per its guidance. More importantly, CoreWeave is expected to sustain its remarkable growth in 2026, as it has a sizable revenue backlog. The company's revenue backlog jumped almost fourfold to $55.6 billion in the third quarter. CoreWeave points out that its revenue backlog includes remaining performance obligations (RPO) as well as the revenue it expects to realize in the future under committed customer contracts.
The company's massive backlog growth was driven by the huge contracts it has received from the likes of OpenAI, Meta Platforms, Nvidia, and other hyperscalers in recent months. Not surprisingly, analysts are expecting CoreWeave's revenue to more than double in 2026.
Data by YCharts.
Analysts believe that this stunning growth will send the stock up by 76% in the coming year, based on CoreWeave's 12-month median price target of $122, as per 33 analysts covering the stock. However, CoreWeave could do much better than that.
The stock may soar past Wall Street's price target in the next year
We have seen in the chart above that CoreWeave's 2026 revenue is expected to exceed $12 billion. Importantly, the company has a big enough backlog that should help it easily meet that target. Another point worth noting is that CoreWeave is quickly building more data center capacity to convert that huge backlog into revenue.
It ended Q3 with 590 megawatts (MW) of active data center capacity, up by 120 MW from Q2. CoreWeave management anticipates bringing at least 1 gigawatt (GW) of active data center capacity online within the next 12 to 24 months. That would translate into a quarterly addition of 125 MW, assuming it takes two years to put the 1 GW active capacity into operation.
So, CoreWeave's active power capacity could at least double in 2026, even if it adds 125 MW every quarter, paving the way for it to double its revenue. However, CoreWeave remains focused on "accessing new capital pools that meaningfully reduce our cost of capital, and scaling both our capacity and organization at an unprecedented pace."
The company's aggressive capacity expansion isn't surprising as it operates in a "highly supply-constrained environment where the demand for CoreWeave best-in-class AI cloud platform far exceeds available capacity." Hyperscalers and AI companies are seeking to acquire AI compute capacity to run AI workloads and harness the productivity gains of this technology.
CoreWeave, therefore, is operating in a favorable demand-supply environment, which should ensure that whatever capacity it offers to customers is quickly taken up. So, if it manages to add capacity at a more aggressive pace next year, it could easily beat Wall Street's revenue estimates. However, even if its revenue is in line with consensus expectations at $12.1 billion and it trades at 5.5 times sales after a year (in line with the Nasdaq Composite index's average sales multiple), its market cap could reach $67 billion.
CoreWeave has a market cap of $35 billion as of this writing, which means that its stock price could nearly double by next year. So, investors looking to capitalize on the AI infrastructure boom should still consider buying this AI stock, as the Nasdaq's rally and CoreWeave's impressive growth could send it soaring in the new year.
