Is CoreWeave a Better Investment Than Nvidia?

Core Points - CoreWeave has signed significant contracts, including a $14 billion deal with Meta Platforms and a $6.5 billion expansion with OpenAI, leading to a stock increase of nearly 34% since September [1][6] - The company's goal is to become a leading provider of AI cloud computing, necessitating further investment in computing capacity, particularly Nvidia chipsets [2][3] - CoreWeave's revenue surged 207% year-over-year to $1.2 billion, driven by high demand for AI computing capacity [6] Business Model - CoreWeave's model involves renting out computing power, allowing clients flexibility in managing workloads without the need for immediate infrastructure investment [3] - The reliance on Nvidia GPUs is critical, as they are the most flexible computing units for AI workloads, although competition from custom AI chips is increasing [4] Future Considerations - There is uncertainty regarding CoreWeave's future after the expiration of major contracts with Meta and OpenAI, as both companies are developing their own computing capabilities [7] - CoreWeave is currently unprofitable, with a net loss margin of 24% in Q2, raising concerns about its sustainability in the long term [9] - The high demand for AI computing may not last, and if CoreWeave raises prices to achieve profitability, clients may opt to build their own infrastructure instead [9][10]