Is This AI Stock the Next Nvidia?

The Rise of AI Stocks and the Case of CoreWeave

In recent years, the artificial intelligence (AI) market has seen explosive growth, with several stocks emerging as key players. Among them, CoreWeave has become one of the most talked-about names in the AI sector. However, while it has gained attention for its rapid expansion and early advantage in cloud-based data center GPUs, it may not yet be positioned to become the next Nvidia.

Nvidia, a leader in the AI space, has demonstrated remarkable performance over the past decade. From fiscal 2015 to fiscal 2025, its revenue grew at a compound annual growth rate (CAGR) of 39%, and its earnings per share (EPS) increased at a CAGR of 58%. This growth was largely driven by its dominance in the data center GPU market, which is crucial for processing complex machine learning and AI tasks. According to JPR, Nvidia controls more than 90% of the global discrete GPU market, and all of the world’s top AI companies, including OpenAI, Microsoft, and Meta Platforms, rely on its chips. This dominance has translated into significant stock gains, with Nvidia's shares soaring 31,430% over the past 10 years and making it the world’s most valuable company with a market cap of $4.26 trillion.

Despite its impressive run, Nvidia still appears relatively undervalued, trading at 39 times its forward adjusted earnings. Analysts expect its revenue and EPS to grow at a CAGR of 33% and 31%, respectively, from fiscal 2025 to 2028 as the AI market continues to expand. For investors seeking a straightforward and safe way to participate in the AI boom, Nvidia remains a strong choice.

CoreWeave: A New Player in the AI Space

CoreWeave, a smaller-cap AI stock with a market cap of around $45 billion, has been gaining traction as a potential contender. Founded in 2017 as a cryptocurrency miner, the company initially used GPUs to mine Ether. After the crypto crash in 2018, it pivoted to AI, investing heavily in Nvidia’s H100 GPUs and using them as collateral to secure additional funding. This bold move caught the attention of Nvidia, which invested $100 million in CoreWeave in 2023. Later that year, Nvidia added another $250 million during CoreWeave’s IPO, increasing its stake to 24.28 million shares worth approximately $2.2 billion. This makes Nvidia one of CoreWeave’s largest shareholders.

Unlike larger cloud infrastructure providers, CoreWeave focuses exclusively on cloud-based GPUs for AI processing. The company claims this streamlined approach allows it to process AI tasks 35 times faster and 80% cheaper than traditional platforms. Its customer base includes major tech firms such as OpenAI, Meta, and IBM.

Growth and Challenges

CoreWeave has experienced rapid growth, expanding its data centers from three in 2022 to 33 in the U.S. and Europe by 2025. Revenue surged from $16 million in 2022 to $1.92 billion in 2024, then jumped 276% to $2.19 billion in the first half of 2025. Analysts project revenue to reach $5.25 billion for the full year. However, this growth has come at a cost. Net losses widened from $31 million in 2022 to $863 million in 2024, and further to $661 million in the first half of 2025. Operating expenses have risen sharply due to the expansion of data centers, GPU purchases, and energy costs.

The company is also relying heavily on debt, with interest payments surging from $28 million in 2022 to $784 million in 2024. Its planned $9 billion acquisition of Core Scientific could increase debt levels even further. Despite having $1.15 billion in cash, CoreWeave carries $22.42 billion in total liabilities, making it a high-risk investment.

Is CoreWeave the Next Nvidia?

While CoreWeave has significant growth potential, it is unlikely to replicate Nvidia’s success. The company lacks a dominant position in a critical part of the AI market and faces competition from larger cloud providers like Amazon’s AWS. Additionally, its business model has not yet proven sustainable, and its valuation of 12.5 times this year’s sales is not considered a bargain.

For now, CoreWeave remains a speculative growth play rather than a sure bet for long-term gains. Investors should carefully consider the risks before committing capital to the stock.