Nvidia Expands Investment Strategy with CoreWeave’s Stock Surge
Nvidia (NASDAQ: NVDA) is widely recognized as a leader in artificial intelligence (AI) chips, pivotal in the rapidly evolving tech market. The semiconductor components Nvidia produces not only aid in AI functionality but also position the company as a significant player in this transformative sector.
Beyond its chip manufacturing, many may not realize that Nvidia invests its own funds in publicly traded stocks and late-stage start-ups, often with a focus on AI development or partnerships. Recently, Nvidia has made significant moves in a stock that has already seen its price double since its initial public offering (IPO) earlier this year.
Transition from Disappointment to Rapid Success
Before CoreWeave (NASDAQ: CRWV) went public in March, Nvidia was already involved, owning approximately 5% of the company’s shares according to its prospectus.
Image source: Getty Images.
CoreWeave specializes in data centers designed for running AI applications. It acquires graphics processing units (GPUs) from Nvidia, which are installed in its facilities. CoreWeave then rents out its data center services to companies needing AI support without incurring infrastructure costs.
Interestingly, Nvidia is also a customer of CoreWeave. During a CNBC appearance, CEO Mike Intrator described the relationship as “symbiotic.”
The CoreWeave IPO was among the most anticipated of the year, initially aiming for a $35 billion valuation. However, due to various market conditions, including competition from China’s DeepSeek, it launched at a $23 billion valuation, priced at $40 per share.
Despite the underwhelming IPO, CoreWeave’s stock surged over 100% just two months post-launch, reaching $107. This includes a recent 19% increase attributed to positive analyst actions—Citigroup analyst Tyler Radke raised his price target from $43 to $94, while CoreWeave announced an increase in its private offering of senior notes from $1.5 billion to $2 billion.
Can CoreWeave Sustain Its Growth?
CoreWeave operates firmly within a thriving sector and is positioned for significant attention. The company has raised its revenue forecasts for the year from $4.6 billion to $5 billion in its latest earnings report.
However, investor enthusiasm has been tempered by a marked increase in capital expenditures (capex) that exceeded analyst predictions. Additionally, concerns exist regarding CoreWeave’s dependency on Microsoft, which accounted for 62% of its revenue in 2024, and its current lack of profitability.
At this time, I remain neutral on the stock. While I view CoreWeave’s business model and connection to Nvidia as strengths, the rapid increase in valuation suggests the need for a more measured approach moving forward.
Is CoreWeave a Good $1,000 Investment Today?
Before investing in CoreWeave stock, take the following into account:
The Motley Fool Stock Advisor analyst team has identified what they consider the 10 best stocks to buy right now, and CoreWeave is not among them. The selected stocks are expected to generate substantial returns in the years to come.
For perspective, Netflix was recommended on December 17, 2004, and turning a $1,000 investment at that time would now yield $642,582! If you had invested similarly in Nvidia on April 15, 2005, your $1,000 investment would be worth $829,879!*
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*Stock Advisor returns as of May 19, 2025
Citigroup is an advertising partner of Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
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