CoreWeave (NASDAQ: CRWV) zoomed from zero to hero on the stock market in just a couple of months.
The company, which rents out access to the popular Nvidia graphics processing units (GPUs) needed to power generative-AI products, went public at the end of March in an initial public offering (IPO) that was widely regarded as a disappointment. The company had to lower its IPO price due to lack of demand, and sold fewer shares than it had intended.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
The debut priced at $40 and the stock closed below that mark as recently as April 22, but since surged due to positive updates from the company, as well as the overall market rebound made possible by cooling trade war tensions and generally solid economic data.
At the time of this writing, CoreWeave is up 270% from its IPO price, and it could move even higher as the company is delivering phenomenal growth.
In addition to improving sentiment, there were a number of news items that propelled CoreWeave shares higher. First, CoreWeave signed a $4 billion deal with OpenAI in May, showing continuing demand for CoreWeave’s cloud-based platform. The deal signaled a diversification of its customer base away from Microsoft., which in 2024 accounted for 62% of CoreWeave’s business.
Additionally, Nvidia revealed that it owned $900 million of CoreWeave stock at the end of the first quarter. That stake is now worth roughly $3 billion.
CoreWeave also posted strong first-quarter results with revenue up 420% to $981.6 million, though its generally accepted accounting principles (GAAP) net loss expanded from $129.2 million to $314.6 million.
CoreWeave’s business model requires it to spend large sums up front on Nvidia chips, adding risk to the stock. The company’s guidance called for revenue of $4.9 billion to $5.1 billion for the year, and capital expenditures of $20 billion to $23 billion.
Image source: Getty Images.
Predicting where any stock will be in a year is difficult, but CoreWeave faces additional uncertainty due to its short history as a publicly traded company, the inherent risk in its business model, the surge in its valuation, and the volatility in the broader market and in the AI sector.
CoreWeave could easily top its revenue forecast for the year as its guidance, coming in its first report as a publicly traded company, is likely conservative. The forecast calls for roughly 160% in revenue growth.
The company is also likely to see more big deals such as the one it just announced with OpenAI as it needs those to fuel its growth, and demand for AI computing power is still soaring.
Investors appear willing to overlook CoreWeave’s high debt burden in a rising interest rate environment, but the company would be rewarded if it refinanced its debt or lowered its risk in another way.
A year from now, CoreWeave seems on track to have trailing revenue of around $6 billion, though its bottom-line results are much harder to predict, especially as a business that’s profitable on an earnings before interest, taxes, depreciation, and amortization (EBITDA), but not on a GAAP basis.
Ultimately, the company is beholden to broader demand for AI, though that seems to be safe for now.
CoreWeave is a high-risk stock, but it looks well positioned to be a leader in AI cloud infrastructure as its growth rate reflects soaring demand for its services.
The company is burning cash and pays a high interest on its debt, adding to the risk. However, considering the blowout growth rate and its leading position in AI cloud infrastructure, the upside potential the stock offers after its post-IPO rally is substantial. Following that logic, opening a small position wouldn’t be a bad idea for risk-tolerant investors.
Before you buy stock in CoreWeave, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $868,615!*
Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of June 9, 2025
Jeremy Bowman has positions in Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
