Newly listed data center infrastructure provider CoreWeave (CRWV) CEO Michael Intrator believes that his company is different from its larger rival Oracle (ORCL), while acknowledging Oracle as a “formidable competitor.” Intrator shared his thoughts during a Monday interview with CNBC’s Jim Cramer.
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The interview mainly focused on CoreWeave’s $9 billion acquisition of Core Scientific (CORZ). Following the announcement of the all-stock deal, CRWV stock fell 3.3% yesterday, while CORZ stock rallied 17.6%.
Here’s Why CoreWeave Is Different from Oracle
Both CoreWeave and Oracle compete in the data center infrastructure space, driven by the rapid pace of artificial intelligence (AI) developments. While describing Oracle’s strengths, Intrator said, “Oracle has its own set of products that they’re offering, and they are a formidable competitor.” However, CoreWeave is not aiming to incorporate any legacy technology or to be defined by any history of success or failure.
Instead, according to the CEO, what differentiates CoreWeave is its “software stack that drives the platform that we’re able to achieve on our infrastructure.” Intrator highlighted that CoreWeave has built its software stack from scratch, with a focus on optimization. He also noted that the market will take time to understand this difference and the true extent of CoreWeave’s business. A software stack refers to the multiple layers of independent software components that together support the execution, development, and operation of an application.
Meanwhile, Oracle is one of the oldest and largest technology companies. Oracle leverages its Oracle Cloud Infrastructure (OCI) to serve large enterprise customers seeking secure, low-latency workloads. The company is poised to make a significant impact in the AI space through its role in President Trump’s $500 billion Stargate Project.
Strengthening CoreWeave’s Data Center Footprint
CRWV stock has surged over 330% since its public market debut in March this year, suggesting that investors see significant potential in the company. CoreWeave’s acquisition of Core Scientific is expected to deliver notable benefits. Intrator noted that the combined company will be better positioned to build and extend data center offerings for the “most demanding AI clients in the world.” He added that there is rapidly growing demand for both the infrastructure and the software compute that powers AI.
Notably, CoreWeave has been renting Core Scientific’s data centers for several years. However, once the deal is completed, CRWV will save roughly $10 billion in future lease obligations to CORZ. Additionally, CoreWeave’s power capacity will increase by 1.3 gigawatts through the acquisition of Core Scientific’s data center sites across the U.S. Having said that, CoreWeave is currently burning cash and depends on two large clients, OpenAI and Microsoft (MSFT), for most of its sales.
Is CRWV Stock a Buy, Hold, or Sell?
Wall Street remains divided on CoreWeave’s long-term stock trajectory. On TipRanks, CRWV stock has a Moderate Buy consensus rating based on six Buys, 11 Holds, and one Sell rating. Also, the average CoreWeave price target of $78.53 implies a massive 50.8% downside potential from current levels.
