When it comes to cloud computing, Amazon was the pioneer, and it remains the leading company in the industry: Amazon Web Services still has a 29% market share. Over time, though, companies like Microsoft, Alphabet, and many others have emerged as competitors.
Nonetheless, when it comes to the next generation of data center technology, CoreWeave (CRWV 2.70%) seems to be emerging as a leader, particularly when it comes to a cloud infrastructure that's designed specifically to support artificial intelligence (AI) applications. Thanks to that technology, it is set to lead the future of the cloud.
Image source: Getty Images.
Why CoreWeave?
Admittedly, with a market cap of just $46 billion, CoreWeave is a tiny fraction of the size of the megacaps that it's competing with. It's also operating at a loss, which might lead one to wonder how it competes with these larger rivals at all.
Still, some customers prefer CoreWeave's AI-specific cloud offerings to the general-purpose infrastructure of the larger hyperscalers. The company's backlog was more than $55 billion as of the end of 2025's third quarter, up from about $30 billion just three months earlier.
Moreover, it has partnered with Nvidia, a CoreWeave investor that is supplying the cloud company with its latest AI accelerators. So it should come as little surprise that not only are AI software leaders like OpenAI among its clientele, so are some of its cloud competitors. Microsoft struck a multibillion-dollar deal that will have CoreWeave supplying the tech giant with processing power for its AI models, which frees up some of its own Azure infrastructure for Microsoft's cloud customers.
NASDAQ: CRWV
Key Data Points
CoreWeave's financial condition
Though the company is losing money on the bottom line, CoreWeave's most significant challenge is not keeping its doors open. It's keeping up with its massive demand.
In the first nine months of 2025, it booked nearly $3.6 billion in revenue, a 204% increase compared to the same period in 2024. Still, operating expenses rose by 267% over that time frame as it invested in building out its infrastructure so that it could attempt to fulfill its massive backlog commitments.
CoreWeave laid out over $6.2 billion in capital expenditures in the first nine months of the year. It has had borrow money cover those costs, and had accumulated more than $14 billion in debt as of the end of Q3, most of which is at interest rates between 9% and 15%.
However, it recently began to address that by issuing a $2.2 billion offering in convertible notes at just 1.75%. In exchange for that low interest rate, note holders will have the option of exchanging those notes for stock at a price of $215.60 per share through 2031.
That is close to twice the current stock price. Nonetheless, CoreWeave could surpass that level over the next few years and deliver those noteholders strong returns. Its price-to-sales (P/S) ratio of 9 compares well to most tech growth stocks, which suggests that it has considerable room for stock price increases.
Neoclouds as the future of cloud computing
CoreWeave's AI-focused neocloud is benefiting from its partnership with Nvidia, as evidenced by its growing backlog.
Admittedly, it's necessary for the company to borrow heavily in the near term to build out its footprint so it can meet that demand. Those conditions are putting pressure on CoreWeave's business model, and by some measures, there are high expectations baked into the stock price, making it a somewhat risky investment.
However, given its relatively low P/S ratio, CoreWeave may be worth the risks it faces. Considering its huge backlog and its revenue growth track record, it more than likely will be able to live up to the hype.
