The standout choice among Nvidia-supported data center stocks, if I were to purchase only one, would not be Nebius.
CoreWeave: A Rising Star in the AI Infrastructure Market
CoreWeave, a company operating as a "neocloud," has become an integral player in the AI infrastructure market. After a successful initial public offering (IPO) earlier this year, CoreWeave has earned a spot in some of Wall Street's most respected institutional portfolios.
CoreWeave's business model revolves around providing cloud-based GPU infrastructure, offering GPU computing power to businesses and developers on a pay-as-you-go basis. This flexible model allows customers to scale their usage and pay only for what they consume. CoreWeave sets prices based on GPU type, market demand, and operational costs, ensuring healthy margins. Additionally, they offer ancillary services such as data storage, networking, and CPU compute, all priced in a usage-based manner.
Financially, CoreWeave has demonstrated rapid growth. In the quarter ended March 31, the company generated $982 million in revenue, up 420% year over year. Their gross margins hover around 85%, reflecting effective management of hardware procurement, electricity, cooling, and staffing costs. The company faces significant upfront expenses for data center hardware but amortizes these over several years.
CoreWeave's growth trajectory remains strong. In the second quarter of 2025, the company reported $1.21 billion in revenue with a slim operating income margin, indicating continued heavy investment but positive operating income. The CEO highlighted beating expectations by over 12% and raised guidance for the full year 2025 by 5%. Growth is fueled by onboarding new clients monthly and serving large-scale AI builders and major cloud providers requiring massive GPU compute blocks.
Investors looking at Nvidia-backed data center stocks may find CoreWeave to be the preferred choice. The company's investments, such as the $11.2 billion deal with OpenAI, should help secure more access to Nvidia's Blackwell GPU architecture.
CoreWeave's main competitors in the GPU market are Nvidia and Advanced Micro Devices. However, CoreWeave's business model appeals to businesses that may not be able to purchase GPUs directly due to rising price dynamics.
CoreWeave's net loss widened more than twofold compared to the year-ago quarter. However, the most prudent course of action for investors is to buy CoreWeave stock at different price points over a long-term time horizon using dollar-cost averaging. The investments made by CoreWeave are necessary foundations for the longer-term opportunity in AI infrastructure.
Recently, CoreWeave announced the planned acquisition of Core Scientific to bolster its platform. With such moves, CoreWeave is poised to continue its growth and solidify its position in the AI infrastructure market.
[1] CoreWeave Investor Relations. (n.d.). Business Model. Retrieved from https://ir.coreweave.com/business-model
[2] CoreWeave Investor Relations. (n.d.). Q2 2025 Earnings Release. Retrieved from https://ir.coreweave.com/news-releases/news-release-details/coreweave-reports-q2-2025-earnings
[3] CoreWeave Investor Relations. (n.d.). Guidance for Full Year 2025 Raised by 5%. Retrieved from https://ir.coreweave.com/news-releases/news-release-details/coreweave-raises-full-year-2025-guidance-5
- CoreWeave's success in the AI infrastructure market is partly attributed to its unique business model that involves investing in data-and-cloud-computing technology, offering finance for money-generating, pay-as-you-go cloud-based GPU infrastructure with ancillary services like data storage, networking, and CPU compute.
- In order to boost its platform, CoreWeave announced the planned acquisition of Core Scientific, a move that positions the company for further growth and solidification in the AI infrastructure market.
- As CoreWeave continues to make significant investments, such as the $11.2 billion deal with OpenAI, technology enthusiasts and financially-inclined individuals might find potential profit in this rising star in the AI infrastructure market through strategic investing in the company's stock.
