Why CoreWeave (CRWV) is the Best AI Stock You’ve Never Heard Of

Many investors might have missed one of the best-performing stocks in the U.S. right now: CoreWeave (CRWV). This AI cloud platform has expertly aligned its specialized GPU-powered cloud infrastructure with the booming demand for AI, leading to a remarkable tripling of its stock price since March. Despite its stellar performance, the broader market often overlooks CoreWeave’s crucial role in the rapidly expanding AI infrastructure sector.

For those looking for direct exposure to AI beyond typical software offerings, CRWV presents a compelling opportunity worth considering. Founded in 2017 by a dynamic team with backgrounds in finance and technology, CoreWeave initially focused on cryptocurrency mining but pivoted to cloud infrastructure in 2020. The founders recognized early on that GPU computing would become foundational in advancing technological capabilities.

In April 2023, CoreWeave went public on the Nasdaq, raising around $1.5 billion and debuting with a market capitalization near $23 billion. Since then, its growth trajectory has been impressive. For the fiscal year 2024, the company reported revenue of $1.92 billion—an astonishing 700% increase from $229 million in 2023.

What truly distinguishes CoreWeave is its design tailored for the AI era. Unlike legacy cloud providers like Amazon Web Services (AWS) or Microsoft Azure, which were originally created for general-purpose computing and web hosting, CoreWeave was constructed to handle the high-performance demands of AI model training and inference. It’s not merely a GPU reseller; CoreWeave owns and operates its complete technology stack, including data centers, hardware, and proprietary orchestration software. This vertical integration allows it to maintain control over pricing, performance, and scalability—a significant advantage over generalist cloud platforms.

While companies like Lambda Labs and Cerebras Systems are pursuing similar pathways, CoreWeave currently leads in execution and enterprise adoption. The company has engaged in creative marketing strategies, such as branded vehicles, enhancing brand awareness and recognition.

The financials further underscore CoreWeave’s appeal. In FY2024, the company reported a gross margin of 74% on its $1.92 billion revenue, and its adjusted EBITDA showed a profit of $1.2 billion, highlighting the underlying strength of its operations. However, the company did record a GAAP net loss of $863 million, primarily due to substantial capital expenditures and debt servicing linked to its rapid infrastructure development. While this pattern is typical for capital-intensive businesses, CoreWeave is committed to sustainable growth rather than unsustainable customer acquisition spending. Its ownership structure also indicates a long-term focus on building a durable foundation for AI computing infrastructure.

Despite its promise, CoreWeave trades at a premium valuation. At its IPO, the company was valued at about 12x trailing revenue, or around 15x on an enterprise value basis after accounting for debt. Although these multiples may seem elevated, they align with other high-growth companies in the AI sector. Companies like Snowflake and Palantir have historically traded at comparable, if not higher, valuation levels.

The main risk for CoreWeave lies in its operational execution rather than its current valuation. However, no rapidly growing company is without risks. A significant concern is customer concentration; Microsoft accounted for over 60% of CoreWeave’s total revenue in 2024, raising worries about dependence on a single client. While this affiliation lends credibility and demonstrates confidence from a leading technology firm, shifting workloads back to Azure could significantly impact CoreWeave’s revenue.

Recently, CoreWeave signed a five-year agreement with OpenAI worth $11.9 billion, providing some diversification. However, this deal does not entirely alleviate concentration risks, and the company’s long-term success will depend on broadening its customer base.

CoreWeave’s capital expenditure requirements present another significant challenge. Building and scaling high-performance GPU clusters is inherently expensive. The company has raised over $15 billion through a mix of equity financing and asset-backed lending to support infrastructure growth. While current returns are strong, the sustainability of this model could be tested if demand for AI slows or if access to capital becomes more limited. Additionally, broader macroeconomic and geopolitical risks must be considered, especially disruptions in the semiconductor supply chain that could delay GPU shipments.

Despite these challenges, CoreWeave stands in a prime position in the AI infrastructure lifecycle. According to McKinsey, global data center demand for AI workloads is projected to grow at a remarkable compound annual rate of 20% through 2030, with GPU-as-a-service expected to develop into a $27 billion market by the end of the decade. CoreWeave’s vertically integrated business model is well-poised to capitalize on this growing demand.

On Wall Street, CoreWeave enjoys a consensus “Moderate Buy” rating based on multiple analyst evaluations. However, the average price target of $47.42 indicates a potential 70% downside over the next year. This suggests that buying on any dip could be a strategic move.

In summary, while CoreWeave has achieved significant stock price gains and is positioned well in a burgeoning market, it remains a company in the early stages of its growth story. The strong strategic positioning and the importance of AI infrastructure cannot be overstated. While challenges exist, the potential rewards are substantial, making CoreWeave an intriguing investment opportunity for those willing to take a forward-looking stance in the AI landscape. Investing in CoreWeave offers a chance to tap into the foundational layer of the emerging AI economy, showcasing a high-growth, cash-generating business poised to benefit from what may be the most transformative technology trend of the decade.

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