CoreWeave (CRWV) Surges after Nvidia Reveals a Larger Stake in the Company

CoreWeave (CRWV) saw a significant surge of up to 26% on Friday to hit a record high after chipmaker Nvidia (NVDA) revealed that it had a larger stake in the cloud-computing provider than previously reported. Indeed, Nvidia disclosed that it owns 24.18 million shares of CoreWeave, which amounts to about 7% of the company’s outstanding stock, as of March 31. This is a considerable increase from the 5.2% stake mentioned in CoreWeave’s initial public offering (IPO) prospectus.

The increase in Nvidia’s stake in CoreWeave shows that the company continues to support the cloud-computing provider, especially after CoreWeave’s March IPO. Nvidia helped anchor the IPO with an order of about $250 million, which represented around 17% of the deal. The company also acquired roughly 6 million shares to add to its existing position in CoreWeave.

Although CoreWeave has benefited from the increased demand for artificial intelligence computing, it is still facing losses. In fact, it reported a widened loss of $1.49 per share in the last quarter, compared to a $0.62 loss from the previous year. However, despite these losses, CoreWeave’s stock price has skyrocketed to a high of $83.08, which is more than double its $40 IPO price from March. This growth is partly due to Nvidia’s backing and its supply of crucial chips, which allows CoreWeave to provide advanced AI capabilities.

Is NVDA a Good Stock to Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $164.51 per share implies 21.6% upside potential.

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