Since its public debut at the end of March 2025, CoreWeave (NASDAQ: CRWV) has been making waves in the AI infrastructure space, with its stock soaring an impressive 201% from an initial $40 per share to $138.51. This remarkable surge highlights the market’s enthusiasm for the company, which has carved out a significant niche as an Elite Cloud Services Provider within the Nvidia Partner Network, leveraging Nvidia’s cutting-edge AI chips to power its services.
CoreWeave’s close relationship with Nvidia (NASDAQ: NVDA) is at the heart of its rapid ascent. Nvidia, the $3.3 trillion tech giant dominating the AI hardware market, invested $100 million in CoreWeave prior to its April 2023 IPO. At that time, Nvidia held 17.9 million shares of CRWV, a stake that grew to 24.2 million shares by mid-May 2025. This strategic partnership is more than just financial; CoreWeave relies heavily on Nvidia’s latest GPU technology to provide scalable AI compute power to its clients on a pay-per-use basis, effectively making CoreWeave a vital cog in Nvidia’s expansive AI ecosystem.
The AI boom ignited by ChatGPT’s public debut in late 2022 has driven unprecedented demand for AI infrastructure, and CoreWeave has positioned itself as a nimble player intercepting the dominance of the Big Three hyperscalers—Alphabet, Microsoft, and Amazon. While these tech giants are investing heavily in AI and even developing their own AI chips (like Alphabet’s Ironwood TPU and Amazon’s Trainium and Inferentia), CoreWeave offers a flexible alternative for companies seeking access to advanced AI hardware without building their own infrastructure. This dynamic places CoreWeave—and by extension Nvidia—in a unique position to capitalize on the surging AI market.
CoreWeave’s Q1 2025 earnings report, released in mid-May, underscored its rapid growth trajectory. The company posted a staggering 420% year-over-year revenue increase, reaching $981.6 million and beating revenue consensus estimates by nearly 15%. However, this growth comes with growing pains: net losses ballooned by 143% to $314.6 million, a figure that includes $177 million in IPO-related stock compensation expenses. These losses largely reflect CoreWeave’s aggressive scaling efforts as it expands its AI compute capacity.
Despite the lack of profitability, CoreWeave’s outlook remains bullish. The company raised its full-year 2025 revenue guidance to between $4.9 billion and $5.1 billion, signaling confidence in sustained demand. Financially, CoreWeave holds $1.27 billion in cash against current liabilities of $1.24 billion, with total debt standing at $17.2 billion. This debt load is balanced by a robust revenue backlog of $25.9 billion, including an $11.2 billion backlog from a strategic deal signed with OpenAI in early March 2025. CoreWeave currently hosts approximately 1.6 gigawatts (GW) of contracted computing power, with 420 megawatts (MW) actively in use—a scale comparable to Saudi Arabia’s planned AI data center power capacity of 1.5 GW by 2028.
Yet, Wall Street remains cautious. CoreWeave’s enterprise value to earnings before interest, tax, depreciation, and amortization (EV/EBITDA) ratio stands at 52.74, far exceeding the industry average of around 19. This premium valuation reflects high investor expectations fueled by Nvidia’s involvement but also suggests potential volatility. According to forecasting data from The Wall Street Journal, most analysts recommend holding CRWV stock, with an average price target of $69.24—well below the current trading price. The lowest estimate sits at $36 per share, while even the highest target of $100 is below today’s valuation, indicating that a price correction may be on the horizon. Still, many view CoreWeave as a key AI infrastructure play worth considering during market dips.
Adding another layer to this evolving AI infrastructure story is Applied Digital (NASDAQ: APLD), a company specializing in next-generation data centers designed to support high-performance computing (HPC) and AI workloads. Over the past month, Applied Digital’s stock has surged nearly 89%, driven by a recently announced 15-year lease agreement with CoreWeave. This deal, centered on Applied Digital’s Ellendale, North Dakota data center campus, is projected to generate approximately $7 billion in lease revenue over the next decade and a half.
The Ellendale campus is tailored for the demands of AI and HPC, offering large-scale power capacity, efficient deployment, and access to low-cost electricity. The first phase, a 100 MW facility, is on track to become operational in Q4 2025, followed by a second 150 MW building expected by mid-2026. Plans for a third 150 MW facility are already underway, with CoreWeave holding an option to secure this additional capacity as its demand grows. This long-term lease not only provides Applied Digital with a reliable revenue stream but also positions it as a critical infrastructure partner in the AI ecosystem.
Applied Digital’s growth is further supported by strategic partnerships and financing arrangements, including backing from Macquarie Asset Management and Sumitomo Mitsui Bank Corporation. These resources will enable the company to expand its next-generation data centers and capitalize on the booming demand for digital infrastructure. While Applied Digital also serves the cryptocurrency mining sector—a market showing resilience and growing institutional interest—the company’s valuation is notably high, with a price-sales ratio of 10.2x and a total debt load of $689.1 million as of February 28, 2025. Cash reserves stood at $261.2 million at that time.
Wall Street remains optimistic about Applied Digital’s prospects. Northland Securities analyst Michael Grondahl has set a high price target of $18 for APLD stock, implying an 82% upside from current levels. However, investors should weigh the company’s high valuation and debt levels when considering an investment.
The intertwined stories of CoreWeave, Nvidia, and Applied Digital illustrate the complex and rapidly evolving landscape of AI infrastructure. Nvidia’s “very unusual” relationship with CoreWeave—both as a major investor and chip supplier—creates a symbiotic dynamic that benefits both companies. As CoreWeave grows, its success translates into revenue and capital gains for Nvidia, while Nvidia’s cutting-edge technology fuels CoreWeave’s expansion. Meanwhile, Applied Digital’s partnership with CoreWeave highlights the crucial role of physical infrastructure in supporting AI’s explosive growth.
For investors, these developments offer both opportunity and caution. The AI infrastructure sector is expanding at a breathtaking pace, but high valuations, mounting debts, and competitive pressures from hyperscalers developing their own AI chips create risks. As the market matures, discerning investors will need to balance enthusiasm with prudence, watching closely how these companies navigate the challenges ahead.
Ultimately, CoreWeave’s rapid rise and Nvidia’s strategic embedding in the AI value chain underscore the transformative impact of AI on technology and finance alike. With partnerships like that between CoreWeave and Applied Digital, the foundation is being laid for a new era of computing power deployment—one that will shape industries and economies for years to come.
