It has been just under a year since CoreWeave (CRWV 2.56%) went public, and the stock has proven to be a terrific investment for anyone who bought it during the initial public offering.
Specifically, CoreWeave stock is up an impressive 123% since it began trading on the market in March 2025. However, the neocloud infrastructure company experienced a bumpy ride over that time. CoreWeave's share price spiked more than 300% by the end of June 2025, but it's currently down 51% from that 52-week high.
CoreWeave's decline was driven by general market concerns about huge spending on artificial intelligence (AI) infrastructure and whether it's sustainable, as well as worries about a bubble in this sector. The company operates dedicated AI data centers that use graphics processing units (GPUs) from Nvidia.
Should savvy investors capitalize on the dip in CoreWeave stock and consider buying it? Or is the worry justified, and should they avoid CoreWeave? Let's find out.
Image source: Getty Images.
CoreWeave's growth story is just getting started
CoreWeave operates in a supply-constrained market. The need for AI data centers is outpacing supply by a big margin, and CoreWeave helps fill that gap by bringing more data center capacity online. It increased its active data center capacity by 120 megawatts (MW) in the third quarter of 2025 to 590 MW.
NASDAQ: CRWV
Key Data Points
CoreWeave also expanded its potential data center pipeline by more than 600 MW during the quarter, increasing its contracted power capacity to 2.9 gigawatts (GW). This refers to the power available to CoreWeave through contracts with utility providers to build more data centers. This impressive footprint explains why CoreWeave management is confident it can significantly scale up its active capacity.
In the words of CEO Michael Intrator:
This leaves us well-positioned for future growth, with more than 1 gigawatt of contracted capacity available to be sold to customers that we expect to largely come online within the next 12 to 24 months.
So, CoreWeave is likely to more than double its active capacity in the next couple of years. This is going to pave the way for an exponential increase in CoreWeave's revenue from 2025's level of $5.1 billion.
Data by YCharts.
But what's worth noting here is that CoreWeave has a much bigger backlog than the combined revenue it is expected to generate in 2026 and 2027. The company's revenue backlog stood at almost $56 billion at the end of Q3 2025, driven by massive contracts from hyperscalers such as Meta Platforms and OpenAI. That's almost double the $31 billion combined revenue analysts expect it to deliver in 2026 and 2027.
CoreWeave, therefore, can sustain its outstanding growth momentum beyond the next couple of years. Even better, it is well positioned to outpace consensus expectations on account of its terrific backlog by aggressively bringing new data center capacity online. Importantly, there is a chance the company is indeed looking to do so with Applied Digital (APLD 3.61%).
Applied Digital is in the business of designing, building, and operating AI data centers. It counts CoreWeave as a key tenant. Applied Digital pointed out on its earnings call last month that it is looking to build data centers in new locations beyond the two complexes it operates in North Dakota.
Management added that Applied Digital is "well positioned to begin construction of additional campuses in the near term," which isn't surprising as hyperscalers are looking to get their hands on more AI data center sites to fulfill their huge contractual backlogs. This explains why McKinsey expects a whopping $1.7 trillion in spending on AI data centers, at least, by 2030.
This massive outlay will be driven by an estimated 3.5x increase in AI workloads in data centers between 2025 and 2030. So, CoreWeave is likely to keep growing at an incredible pace in the long run. That's precisely the reason why investors should consider buying it before it is too late.
The valuation is expensive, but justifiable
CoreWeave stock trades at 19 times sales, more than double the U.S. tech sector's average sales multiple of 8. However, CoreWeave's revenue is on track to increase by almost 4x in just two years (from 2025 to 2027).
Additionally, it has enough fuel in the tank to keep growing at a terrific pace beyond that. So, buying this AI stock is a no-brainer in 2026, as the huge acceleration in its growth is likely to be rewarded with outstanding long-term gains, driven by the secular growth opportunity in the AI data center market.
