Imagine a company that’s successfully reinvented itself—shifting from crypto mining to powering the AI revolution, with backing from Nvidia (NVDA)—and has already surged 340% since its IPO. That’s CoreWeave (CRWV), a fast-emerging AI cloud infrastructure player that has quickly captured Wall Street’s attention. Interestingly, the majority of CRWV’s owners are institutional investors, which suggests the smart money likes this stock.
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Let’s take a closer look at what’s fueling CoreWeave’s rapid ascent, the depth of its partnership with Nvidia, and why its current valuation might still offer upside. Here’s why this rising AI contender may only be at the beginning of its growth story, and why it may be a good idea to go Bullish at the ground floor.
CoreWeave Operations and the Nvidia Connection
Despite the growing excitement around CoreWeave, many investors still aren’t entirely clear on what the company actually does. Here’s a quick primer: Founded in 2017 as a crypto-mining venture, CoreWeave has since transformed into a leading AI-focused hyperscaler, specializing in cloud infrastructure optimized for demanding AI workloads.
Think of CoreWeave as the computing backbone for enterprises that require massive processing power to train and deploy AI models. With 32 data centers across the U.S. and Europe, outfitted with Nvidia’s cutting-edge GPUs, CoreWeave serves high-profile clients like Microsoft (MSFT), OpenAI, and IBM (IBM). Its platform delivers optimized GPU and CPU compute, along with advanced storage and networking, enabling companies to build AI solutions faster and more efficiently.
What truly sets CoreWeave apart is its deep partnership with Nvidia. Not only is Nvidia the company’s primary GPU supplier, but it also owns about 6% of CoreWeave—an investment now worth over $2 billion. Nvidia is also a customer, using CoreWeave’s infrastructure for its own AI operations. This mutually beneficial relationship provides CoreWeave with early access to Nvidia’s latest chip technology—a critical edge in the rapidly evolving world of AI.
Growth Prospects and May’s Stellar Results
Now, CoreWeave’s growth is nothing short of phenomenal, powered by the AI boom. In its first post-IPO earnings report in May, the company reported $981.6 million in Q1 revenue, a 420% YoY spike, surpassing expectations of $853 million.
Meanwhile, adjusted EBITDA grew 480% to $606.1 million, with a 62% margin, indicating that the company isn’t surrendering its bottom-line potential for growth (i.e., growth is entirely organic). In the meantime, the $25.9 billion revenue backlog, which includes an $11.2 billion deal with OpenAI, suggests that substantial demand is expected to be sustained moving forward.
The AI industry’s trajectory supports this. With global AI spending projected to hit $300 billion by 2026, CoreWeave’s focus on GPU-powered cloud services positions it perfectly. Catalysts include its expansion to 420 MW of active data center power, new software from its acquisition of Weights & Biases, and deals such as a $7 billion lease with Applied Digital (APLD). I believe these moves ensure CoreWeave can scale to meet soaring demand without missing a beat.
Looking ahead, CoreWeave expects 2025 revenue to be between $4.9 billion and $5.1 billion, representing a 363% increase, along with plans for capital expenditures of $20 billion to $23 billion. New clients across industries, from healthcare to finance, are flocking to its platform, which should also diversify revenue beyond Microsoft’s 62% share last year.
Is CRWV’s Valuation Justified?
While CoreWeave’s 340% surge since its IPO might initially suggest the stock is overbought, there’s a strong case to be made that it still has meaningful upside. With a current market cap around $78 billion and projected 2025 revenue of $5 billion, the stock trades at a forward price-to-sales (P/S) ratio of roughly 15.5. Looking ahead to 2026, revenue estimates rise to $11 billion, bringing the P/S ratio down to just 6.7. For a company boasting 73% gross margins and triple-digit revenue growth, that multiple looks compelling.
CoreWeave is not yet profitable, posting a net loss of $314.6 million in Q1, partly driven by IPO-related expenses and $8.7 billion in debt. However, the underlying business appears strong, with adjusted operating income reaching $162.6 million. The demand for AI infrastructure shows no signs of slowing, and CoreWeave’s long-term, multi-year contracts with major clients like OpenAI and Microsoft provide a stable, recurring revenue base.
While elevated short interest (over 30%) and the upcoming lock-up expirations in September may introduce volatility, the fundamentals point to substantial long-term potential for investors willing to weather short-term fluctuations.
Is CoreWeave a Buy, Hold, or Sell?
Currently, most analysts are bullish on CoreWeave stock. The stock has a Moderate Buy consensus rating, based on six Buy and 11 Hold ratings assigned over the past three months. Only one analyst rates the stock as a Sell.
Interestingly, CRWV’s average stock price target of $78.53 implies a 50% downside potential over the next twelve months, suggesting that most analysts believe the stock has run ahead of itself, despite their optimistic business outlook.
CoreWeave Seeks Long-Term Upside via AI Upstream
CoreWeave is emerging as a major force in the rapidly evolving AI landscape. Backed by Nvidia, supported by a strong revenue backlog, and gaining traction with high-profile clients, the company is well-positioned to become a dominant player in the AI cloud infrastructure space.
Its stock rally appears to be driven by genuine business momentum rather than mere hype. With a projected 2026 price-to-sales ratio of just 6.7—paired with strong gross margins and exposure to a powerful, long-term AI tailwind—CoreWeave still looks attractively valued.
While its debt load and capital-intensive growth strategy do present risks, the scale of the AI opportunity and CoreWeave’s strategic positioning make it a compelling option for investors looking to get in early on what could be the next major tech breakout.