Could This High-Flying Artificial Intelligence Stock Be the Next Nvidia?

Nvidia, a leading AI chipmaker, faces high valuation concerns, leading investors to consider CoreWeave as a potential next big stock in AI. CoreWeave has gained over 300% since going public, leveraging Nvidia’s technology to provide GPU computing capacity. However, substantial net losses and high operating costs create serious questions about its path to profitability, making it a risky investment for those with low risk tolerance.

Nvidia, the powerhouse in artificial intelligence, stands as one of the world’s most valuable firms with a market cap exceeding $3 trillion. Known for its top-tier chips that are critical for building AI models and chatbots, Nvidia has become a crucial player for tech companies aiming to ride the AI wave and not get left behind. However, the high valuation of Nvidia might discourage some investors from jumping in right now, especially with the search for more attractively priced stocks.

Among the names that could tempt investors looking for the next Nvidia is CoreWeave, which has been on fire. CoreWeave, a company Nvidia itself has stakes in, went public in March and has already racked up impressive gains of over 300%. Though at around $80 billion, it’s small compared to giants like Nvidia, CoreWeave has carved out a niche by offering GPU computing capacity, allowing customers to leverage Nvidia’s high-performance chips without the hefty infrastructure costs.

What really sets CoreWeave apart is its ability to provide the resources needed for companies to test and train AI models. This is particularly critical now that more firms are diving into AI development. The surge in business coincided with staggering sales of $981.6 million reported for the first quarter of 2025, soaring 420% year-over-year from $188.7 million in the same quarter the previous year. CEO Michael Intrator noted, “Demand for our platform is robust and accelerating as AI leaders seek the highly performant AI cloud infrastructure required for the most advanced applications.”

But it’s not all sunshine and rainbows; CoreWeave is facing a tough road to profitability. Despite skyrocketing sales, the company’s net losses ballooned from $129.2 million to a whopping $314.6 million just in the last quarter. Additionally, operating expenses surpassed $1 billion, and interest costs hit $263.8 million. That’s a staggering amount of red ink for a company whose revenue is climbing.

The allure of CoreWeave is clear, with growth that’s captured attention, but this doesn’t guarantee it will rival Nvidia. Investors need to be cautious about the bottom line, as the road to a stable profit could be rocky. Any shifts in the economic landscape or cutbacks in AI spending from tech firms could put CoreWeave’s growth at risk since it’s heavily reliant on that upward momentum.

While CoreWeave’s performance on the market looks promising for a fresh public company, potential investors ought to manage their expectations. Volatility is part and parcel of investing in emerging AI stocks. For those with a high-risk appetite, CoreWeave might seem enticing, but it’s probably not the ideal pick right now with numerous other AI companies available at lower price points.

In summary, CoreWeave has made waves with its strong sales and unique GPU rental model, riding the growing AI trend. However, its massive net losses raise questions about its profitability. Investors need to weigh the risks carefully, especially given the potential for economic fluctuations affecting tech spending. While it’s gaining traction, CoreWeave isn’t the next Nvidia just yet—caution and expectation management are crucial for potential investors.

Original Source: www.fool.com