CRWV vs. GOOGL: Which AI Infrastructure Stock Is the Better Buy Now?

Core Insights - CoreWeave (CRWV) and Alphabet (GOOGL) are key players in the AI cloud infrastructure market, with CRWV focusing on GPU-accelerated services and GOOGL leveraging its established tech presence and diverse revenue streams [1] - The demand for AI infrastructure is rising, benefiting both companies, but the extent of the benefits differs, prompting investors to evaluate which stock presents a better opportunity [1] CoreWeave (CRWV) Highlights - CRWV experienced a remarkable revenue increase of 207% to $1.2 billion in Q2, marking its first billion-dollar quarter, with adjusted EBITDA nearly tripling to $753.2 million [2] - Strategic partnerships with OpenAI and NVIDIA are pivotal, with a recent $6.5 billion contract expansion with OpenAI, bringing the total contract value to $22.4 billion, enhancing revenue visibility and validating CRWV's infrastructure [3] - Collaboration with NVIDIA includes early adoption of H100, H200, and GH200 clusters for AI workloads, optimizing cloud services for NVIDIA systems [4] - CRWV is expanding its data center network, targeting over 900 MW of active power by year-end, and launching a Ventures Fund to invest in AI startups, further solidifying its market position [5] - However, CRWV's aggressive expansion is accompanied by high leverage, leading to increased interest expenses, which surged to $267 million from $67 million year-over-year, with projected Q3 expenses between $350 million and $390 million [6] Alphabet (GOOGL) Highlights - GOOGL is a dominant player in the AI cloud infrastructure space, with Google Cloud revenues increasing by 32% year-over-year to $13.6 billion, representing 14.1% of total revenues [7] - The annual revenue run rate for Google Cloud has surpassed $50 billion, driven by growth in AI infrastructure and GenAI solutions [7] - GOOGL's extensive AI portfolio and optimized data center network, comprising 42 regions and 127 zones, support its competitive edge [9] - The company reported a significant increase in Search and other revenues, which rose 11.7% year-over-year to $54.19 billion, bolstered by AI features [10] - GOOGL has substantial financial resources, with $95.15 billion in cash and equivalents as of June 30, 2025, and generated $27.75 billion in cash from operations in Q2 [11] - Despite its strengths, GOOGL faces intense competition from Azure and AWS, with a projected capital expenditure of $85 billion for 2025 [12] Stock Performance and Valuation - CRWV shares have increased by 18.9%, while GOOGL stock has risen by 14.6% [13] - Both companies are considered overvalued, with CRWV trading at a Price/Book ratio of 21.12X and GOOGL at 8.13X [14] - Analysts have revised earnings estimates downward for CRWV, while GOOGL has seen a marginal upward revision [15] Investment Considerations - Both CRWV and GOOGL are well-positioned to capitalize on the growing demand for AI infrastructure, with GOOGL offering stability and resilience, while CRWV presents a compelling growth opportunity driven by significant contracts and partnerships [16][17]