CoreWeave: Shades of Amazon's Growth-First Strategy

CoreWeave Reaches $5 Billion in Revenue

Thursday, CoreWeave (CRWV) reported Q4 earnings results after the market close. The large-scale GPU-accelerated operator reached an impressive milestone, becoming the fastest cloud provider to reach $5 billion in annual revenue. Total annual revenue more than doubled from $1.9 billion in 2024 to $5.1 billion in 2025, marking a 168% increase.

CoreWeave Backlog Surges

Meanwhile, revenue backlog surged to $66.8 billion, more than quadruple where it started the year ($15B). Recently, CoreWeave received a $2 billion investment from Nvidia (NVDA), the AI king. The investment is significant for the company because it remains a preferred partner for Blackwell GPU deployments and the first to deploy Nvidia GB300 NVL72 systems.

CoreWeave sports some of the fastest bottom-line growth on Wall Street. That said, shares are well of their highs ~$187 from last June for three main reasons:

1.      Lock Up Expiry: When a company has a massive post-IPO move, early private investors often use liquidity to take chips off the table.

2.      Magnetar Capital Sales: Magnetar Capital was an early strategic investor in CoreWeave prior to its IPO. Like early insiders, the company used IPO liquidity to secure some profits.

3.      Debt Load: As hyperscalers’ CAPEX spending boom continues and the AI revolution gains momentum, CoreWeave is forced to take on billions in debt to meet demand.

Why CoreWeave is a Buy

CRWV shares are a buy because the three challenges I described above are real, but will subside in time. First, the IPO lock-up period expired in August, so insider selling is likely to dissipate over tim. Second, although Magnetar is a major shareholder that sold some of its CRWV shares, the company said it has no plans to divest and still believes in the long-term story.

CoreWeave’s Growth-First Strategy Mirrors Amazon

Finally, and most importantly, CoreWeave’s business can be compared to the railroad business in the 19^th century. Upfront costs are astronomical. However, once the front-loaded costs (tracks) are built, the company will enjoy extremely high margins in the long run. A perfect precedent for CoreWeave is Amazon (AMZN), which was famously unprofitable for more than a decade but saw its stock skyrocket. Instead of realizing profits, Amazon wisely reinvested potential profits in infrastructure, technology, and its customer experience. My suspicion is that CoreWeave management is following the exact same playbook.

Bottom Line

Ultimately, the volatility surrounding CoreWeave is a byproduct of its massive scale rather than a flaw in its fundamentals. While the market may fret over short-term debt, the long-term thesis remains anchored by a massive backlog and a direct blessing from Nvidia.

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This article originally published on Zacks Investment Research (zacks.com).

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