Key Points
Nvidia dominates the AI chip market and has a huge financial advantage over CoreWeave.
However, CoreWeave is growing faster and even beats Nvidia on some key valuation metrics.
History is full of epic battles between an underdog and a heavy favorite. Sometimes, the favorite wins -- like the first USA "Dream Team" men's basketball team competing in the Olympic Games. However, the underdog can prevail, too. David against Goliath is probably the most famous example.
Investors get to choose between underdogs and favorites all the time. An intriguing case right now is between a rising star in the artificial intelligence (AI) world and the 800-pound gorilla of AI. Which is the better stock to buy: CoreWeave (NASDAQ: CRWV) or Nvidia (NASDAQ: NVDA)?
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Nvidia's advantages over CoreWeave
Perhaps Nvidia's greatest advantage over CoreWeave is its market dominance. While several companies make AI chips, Nvidia's graphics processing units (GPUs) are perceived as the best in the business. As a result, Nvidia commands a daunting market share. Meanwhile, CoreWeave competes against much bigger AI hyperscalers.
Nvidia's leading market position also gives it greater financial strength than CoreWeave. Importantly, Nvidia is already highly profitable, with net income of $26.4 billion in its latest quarter. CoreWeave posted a net loss of $290.5 million in the second quarter of 2025.
The cash positions of these two companies are starkly different as well. Nvidia had $56.8 billion in cash, cash equivalents, and marketable securities as of July 27, 2025. CoreWeave's cash stockpile at the end of Q2 totaled $1.15 billion. Nvidia's strong financial position allows it to reward shareholders through dividends and stock buybacks. The giant chipmaker can also afford to invest in smaller companies, notably including CoreWeave.
CoreWeave has a single focus: AI infrastructure. Nvidia's business is much more diversified. The company sells GPUs for data centers and gaming systems. It markets the Omniverse 3D collaboration and simulation platform. Nvidia's technology is also used in autonomous vehicles and in robots.
Where CoreWeave comes out on top
Underdog companies often deliver stronger growth than large, established ones. That's the case here. Nvidia's 56% year-over-year revenue growth in its latest quarter was impressive. However, it paled in comparison to CoreWeave's revenue more than quadrupling year over year in Q2.
You could also make a good argument that CoreWeave has more room to run than Nvidia. It's usually easier for a smaller company to grow faster than a larger company. And CoreWeave is much smaller than Nvidia, with a market cap of under $65 billion versus Nvidia's market cap of $4.5 trillion.
Perhaps surprisingly, CoreWeave even beats Nvidia on the valuation front in some ways. We can't use earnings-based valuation metrics since the hyperscaler isn't profitable yet. But CoreWeave's price-to-sales (P/S) ratio of 19 is well below Nvidia's P/S ratio of 28. Its price-to-book (P/B) ratio of 18 is also lower than Nvidia's multiple of 46.
CoreWeave also has something of a diversification advantage over Nvidia. If a rival develops an AI chip that's far superior to Nvidia's GPUs in the future, Nvidia will be in major trouble. CoreWeave, though, should be able to switch to different AI chips for its data centers if that scenario occurs and keep growing.
Better AI stock to buy?
Both of these stocks face risks. For example, a sharp slowdown in AI infrastructure spending would hurt CoreWeave and Nvidia. However, I think that investors who prefer to play it safe (or comparatively safe, anyway) will find Nvidia a more suitable pick. The company would be able to weather a storm better than CoreWeave.
But aggressive investors will likely find CoreWeave more appealing, in my opinion. The company's growth prospects could make it a bigger winner than Nvidia over the next few years.
The good news is that you don't have to choose between underdog and heavy favorite. Barring an AI winter, CoreWeave and Nvidia should deliver solid long-term returns.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
