Meet the Monster Stock That Continues to Crush the Market

CoreWeave (NASDAQ: CRWV), a provider of dedicated artificial intelligence (AI) cloud infrastructure services, launched its initial public offering (IPO) on March 28 at $40 a share. Its stock barely budged after the IPO, but it warmed up in April, heated up even more throughout May, and now trades at about $156 per share. During that same period, the S&P 500 only rose 7% as the Nasdaq Composite advanced 12%.

Let's see why CoreWeave's stock more than quadrupled in just over two months -- and if it's still worth chasing today.

What does CoreWeave do?

CoreWeave was founded in 2017 as a cryptocurrency miner that purchased large quantities of GPUs to mine Ethereum. But after the cryptocurrency crash of 2018, it abandoned the crypto mining market and leveraged its large inventory of GPUs to build a cloud infrastructure platform for processing AI tasks.

Image source: Getty Images.

In 2022, it spent about $100 million to install Nvidia's (NASDAQ: NVDA) high-end H100 GPUs in its data centers. That massive investment paid off as the explosive growth of the AI market -- and the high costs of purchasing Nvidia's GPUs -- prompted more companies to rent CoreWeave's cloud-based GPUs to power their latest AI applications. CoreWeave also used its GPUs as collateral to secure billions of dollars in additional financing.

CoreWeave's dedicated AI cloud infrastructure services differentiate it from bigger and more broadly diversified public cloud platforms like Amazon Web Services (AWS) or Microsoft (NASDAQ: MSFT) Azure. It claims that its dedicated approach makes it about 35 times faster and 80% cheaper than traditional cloud platforms for AI tasks. That disruptive approach attracted the attention of some big investors like Nvidia, Cisco Systems, and PureStorage, which paved the way for its market debut this year.

How fast is CoreWeave growing?

CoreWeave now operates 33 data centers across the U.S. and Europe, up from 15 centers in 2024, 14 centers in 2023, and just three centers in 2022. Its revenue skyrocketed from $16 million in 2022 to $229 million in 2023, then surged again to $1.92 billion in 2024. In the first quarter of 2025, its revenue surged a whopping 420% year over year to $982 million. It had a revenue backlog of $25.9 billion, including a new $11.2 billion contract with OpenAI.

However, CoreWeave's net loss widened from $31 million in 2022 to $594 million in 2023, then widened again to $863 million in 2024. Its operating expenses are soaring as it buys and leases more data centers, purchases more data center GPUs for Nvidia, and absorbs its higher energy fees. Its net loss more than doubled year over year to $315 million in the first quarter of 2025.

A lot of CoreWeave's expansion has been driven by big debt offerings, which caused its annual interest payments to reach $361 million in 2023 and $584 million in 2024. It ended the first quarter of 2025 with $18.8 billion in total liabilities, which gives it an alarmingly high debt-to-equity ratio of 9.9.

It still had nearly $1.3 billion in unrestricted cash and equivalents, but it could burn through that cash quickly and need to take on even more debt as it opens more data centers. It also plans to spend a lot more money on Nvidia's newest Blackwell GPUs.

Another issue is its dependence on Microsoft, which accounted for a whopping 62% of its revenue in 2024. That customer concentration is troubling since it erodes its pricing power while giving Microsoft leverage in negotiating lower fees. It will also generate a lot of revenue from its new deal with OpenAI, but it hasn't disclosed those exact figures yet.

Is too much growth baked into its soaring valuations?

For the full year, CoreWeave expects its revenue to more than double to between $4.9 billion and $5.1 billion. But with a market cap of $77.4 billion, the stock already trades at 15 times that estimate. It's not quite a meme stock yet, but that high price-to-sales ratio could limit its upside potential. CoreWeave might be worth nibbling on right now if you're bullish on the AI market's growth potential. However, you should also remember that it's shouldering a lot of debt, burning a lot of cash, and doesn't plan to break even anytime soon.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Cisco Systems, Ethereum, Microsoft, Nvidia, and Pure Storage. 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.