Better AI Stock: Nvidia or CoreWeave

Core Insights - CoreWeave has experienced significant success since its IPO in March 2025, with its stock price tripling from the launch price, although it remains over 30% below its all-time high [1] - Nvidia is a major player in the AI investment space and has been a benchmark for AI-related investments since 2023, with substantial returns for its investors [2] - Nvidia holds nearly 4 million shares in CoreWeave, raising questions about which company presents a better investment opportunity [2] Company Comparisons - Nvidia's business model focuses on producing high-quality GPUs and related software, maintaining its status as the leading company in the AI computing market [4] - CoreWeave operates a cloud computing model, purchasing Nvidia's GPUs and renting out computing capacity, which has proven successful in the current market [6] - Nvidia's market capitalization stands at $503.1 billion, while CoreWeave's is $70 billion, indicating a significant disparity in size and market presence [5][7] Growth Rates - Nvidia's growth rate has slowed to approximately 50%, down from over 200% in previous quarters, which is still above average for the market [10] - CoreWeave reported a remarkable 207% year-over-year revenue growth in Q2, with a revenue backlog of $30.1 billion, indicating strong future growth potential [10][11] Profitability - Nvidia consistently maintains a net profit margin of over 50%, while CoreWeave struggles to achieve profitability, raising concerns about its financial sustainability [13] - CoreWeave's operational losses could hinder its ability to replace aging computing units, potentially leading to increased debt or share issuance [14] Valuation - Nvidia's valuation is nearly double that of CoreWeave, which may attract investors to CoreWeave despite its lack of profitability [16] - When considering profit margins, Nvidia's performance is superior, with the best cloud computing companies averaging around 25% profit margins after taxes [16] - The price-to-sales ratio analysis suggests that both companies are priced similarly when factoring in profitability, resulting in a tie in this aspect [17] Conclusion - Overall, Nvidia emerges as the stronger investment choice due to its profitability and established market position, while CoreWeave's potential for future growth could make it an attractive option if it achieves profitability [18]