Artificial intelligence (AI) is likely to be one of the most transformative technologies in human history. The International Data Corp. (IDC) says AI will add $19.9 trillion to the global economy by 2030, and Grand View Research estimates spending on AI hardware, software, and services will increase at 36% annually during the same period.
Many investors eager to capitalize on that once-in-a-lifetime opportunity have bought stock in Palantir Technologies(NASDAQ: PLTR), a software vendor that specializes in analytics. Two years ago, the company introduced AIP, a large language model orchestration tool that helps customers infuse generative AI across their businesses.
Palantir's revenue growth has since accelerated in seven straight quarters, and its share price has advanced 1,500% since May 2023. That means $5,000 invested in Palantir two years ago would now be worth about $80,000. Few stocks generate that much wealth so quickly, but a newly public AI company recently rocketed out of the gate.
CoreWeave(NASDAQ: CRWV) held its initial public offering (IPO) on March 28, 2025, and the stock has since advanced 150%. That makes CoreWeave a candidate to be the "next Palantir," meaning the next AI stock to generate blockbuster returns in a relatively short period. Here's what investors should know.
CoreWeave is a leading provider of artificial intelligence infrastructure
CoreWeave offers cloud infrastructure and software services. Hyperscalers like Amazon Web Services and Microsoft Azure provide similar products, but CoreWeave operates what is known as a GPU cloud. In other words, its data centers are purpose-built to support artificial intelligence and other high-performance computing workloads that require GPU acceleration.
Research company SemiAnalysis recently ranked CoreWeave as the best GPU cloud on the market. The report highlighted a few key sources of differentiation. First, CoreWeave is usually among the first to deploy the latest Nvidia GPUs due to its close relationship with the chipmaker. For instance, it was first to make Nvidia GB200 NVL72 instances available, which feature 36 interconnected Grace Blackwell Superchips.
Second, CoreWeave has generally scored very highly at the MLPerf benchmarks, unbiased tests that evaluate the performance of AI hardware, software, and services across training and inference workloads. For instance, CoreWeave achieved record-breaking inference results with Nvidia GB200 Grace Blackwell Superchips in April.
Image source: Getty Images.
CoreWeave is growing at a phenomenal pace, but the company is not profitable
CoreWeave reported impressive first-quarter financial results. Revenue increased 420% to $981 million and adjusted operating income (which excludes stock-based compensation and interest payments on debt) rose 550% to $162 million. However, the company reported a non-GAAP (adjusted) net loss of $150 million, a much larger loss than $24 million in the same quarter last year.
Interest payments accounted for the discrepancy between adjusted operating income and adjusted net income. Building AI infrastructure is capital intensive and CoreWeave has $7.8 billion in long-term debt and lease obligations. The interest expense on that debt was $264 million in the first quarter. Put differently, interest payments consumed more than a quarter of revenue.
In May, CoreWeave completed its acquisition of AI developer platform Weights & Biases, which extends the utility of its platform. Specifically, whereas CoreWeave provides the GPU-accelerated infrastructure required for AI workloads, Weights & Biases provides the tools developers need to train and evaluate AI models, and monitor the performance of AI applications.
CoreWeave currently trades at 18 times sales, which puts the stock somewhere between expensive and reasonable. For context, cloud services company Cloudflare trades at 31 times sales, but Microsoft trades at 13 times sales. Of course, price-to-sales (P/S) ratios are usually a function of earnings power, meaning companies with higher margins tend to have higher P/S ratios.
Unfortunately, it is impossible to know exactly how profitable CoreWeave will be in the future, which makes the stock relatively risky. For that reason, only investors comfortable with extreme volatility -- I'm talking about a 50% drop in the stock -- should consider buying shares today.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon and Palantir Technologies. The Motley Fool has positions in and recommends Amazon, Cloudflare, Microsoft, and Palantir Technologies. 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.
