Is CoreWeave the Next Must-Own Artificial Intelligence Stock After Nvidia?

Nvidia's (NASDAQ: NVDA) stock skyrocketed 25,430% over the past 10 years, turning the chipmaker into the world's most valuable company with a market cap of $4.62 trillion. Most of that rally was driven by the explosive growth of the artificial intelligence (AI) market.

Nvidia is the world's top producer of discrete GPUs. It once sold most of those chips to the PC gaming market to handle graphics in high-end games, but it subsequently launched even more powerful GPUs for data centers to process complex machine learning and AI tasks.

Image source: Getty Images.

Today, most of the world's top tech companies use Nvidia's GPUs to support their latest AI applications. Nvidia now generates most of its revenue from those data center chips, and it should continue to sell the best picks and shovels for that AI gold rush for the foreseeable future.

From fiscal 2025 (which ended this January) to fiscal 2028, analysts expect Nvidia's revenue and earnings per share (EPS) to both grow at a compound annual growth rate (CAGR) of 40% as the secular AI boom continues. Its stock might not seem cheap at 31 times next year's earnings, but it will likely remain the market's must-own AI stock for the foreseeable future.

Yet Nvidia isn't the only hot stock in the expanding AI market. Another promising AI play that attracts a lot of attention is CoreWeave (NASDAQ: CRWV), an AI infrastructure services provider in which Nvidia also owns a 7% stake. Let's take a closer look at CoreWeave and see if it might become the next "must own" AI stock after Nvidia.

What does CoreWeave do?

CoreWeave was once a cryptocurrency mining company that used Nvidia's GPUs to mine Ethereum. But when the cryptocurrency market fizzled out in 2018, it abandoned that volatile business model and repurposed its GPUs to remotely handle AI tasks instead.

In 2022, it significantly expanded that business by spending approximately $100 million on Nvidia's high-end H100 data center GPUs. It used those new GPUs as collateral to secure additional financing to buy more GPUs and build new data centers. At the end of 2022, CoreWeave only operated three data centers. Today, that network has expanded to 33 data centers across the U.S. and Europe. It claims its dedicated cloud-based GPUs can process AI tasks approximately 35 times faster and 80% cheaper than more diversified cloud platforms like Amazon Web Services (AWS) and Microsoft Azure.

What's the bull case for CoreWeave?

As big tech companies roll out more AI applications, they'll need to upgrade their data centers with more powerful GPUs. But building new data centers and buying more GPUs is expensive, so it can be more practical and economical to remotely access CoreWeave's cloud-based GPUs instead.

In 2024, CoreWeave's revenue skyrocketed 738% to $1.92 billion as its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 1,073% to $1.22 billion. From 2024 to 2027, analysts expect its revenue to grow at a CAGR of 114% to $18.7 billion as its adjusted EBITDA increases at a CAGR of 124% to $13.7 billion.

That jaw-dropping growth should be driven by its massive deals with Microsoft, OpenAI, and other AI software giants; its ongoing GPU upgrades; and its new data center openings. Its total revenue backlog swelled to over $55 billion at the end of September, which indicates there's still plenty of pent-up demand for its cloud-based AI infrastructure services.

With an enterprise value of $63.7 billion, CoreWeave still looks reasonably valued at 6 times next year's sales and 9 times its adjusted EBITDA. Therefore, it could have a lot more upside potential than the market's more overheated AI stocks.

What's the bear case against CoreWeave?

The bears will point out that CoreWeave is issuing more shares and taking on fresh debt to fund its aggressive expansion. Its number of outstanding shares has risen about 7% since its IPO this March, and it ended the third quarter of 2025 with a high debt-to-equity ratio of 7.5.

CoreWeave recently tried to acquire Core Scientific (NASDAQ: CORZ) for $9 billion to expand its data center capacity, but that all-stock offer was rejected last month. Its willingness to issue that many shares to fund its expansion could be considered a red flag. It also generates about 70% of its revenue from Microsoft, so its future growth could rely heavily on its future deals with the tech giant.

CoreWeave's adjusted EBITDA is positive, but that metric excludes depreciation costs for its hardware and the amortization of its rising debt. If we include those big expenses, it's expected to remain unprofitable under generally accepted accounting principles (GAAP) until at least 2027. That dilution, high debt, red ink, and customer concentration could make it a risky investment.

It's not the next Nvidia yet

CoreWeave could have a bright future, but I wouldn't call it the next Nvidia. It's established an early mover's advantage in the cloud-based AI infrastructure market, but its moat isn't as wide as Nvidia's, and it hasn't proven its business model is sustainable. It's an interesting speculative investment, but it isn't a no-brainer play on the AI boom.

Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Ethereum, 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.