Core Companies in AI - Nvidia and Palantir Technologies have demonstrated significant strengths in artificial intelligence, leading to substantial earnings growth and stock performance [1][2] - CoreWeave, a new entrant in the market, has emerged as a potential AI powerhouse, outperforming both Nvidia and Palantir with a remarkable 300% stock increase in the first half of 2025 [2][4] CoreWeave's Business Model - CoreWeave generates most of its revenue by renting access to over 250,000 Nvidia GPUs, specializing in AI workloads [4][6] - Nvidia holds a 7% stake in CoreWeave and facilitated the launch of its latest GPUs, indicating a strong partnership [6] Financial Performance - CoreWeave's first-quarter earnings report showed a revenue increase of over 400% year over year, reflecting strong demand for Nvidia's chips [7] - The company's technology and infrastructure expenses surged by more than 500% to approximately $500 million in the first quarter, indicating high capital investment needs [10] Market Trends - The demand for GPUs is expected to grow as more organizations apply AI to real-world problems, particularly in the area of inferencing, which requires significant processing power [8] - CoreWeave's cloud servers are anticipated to have a busy future, driven by ongoing demand for AI capabilities [8] Strategic Moves - CoreWeave plans to acquire Core Scientific, which will eliminate $10 billion in future lease payments, although the stock fell due to concerns about share dilution from the all-stock deal valued at $9 billion [12] - The acquisition is seen as a strategic move to enhance operational efficiency and reduce costs in the long term [12] Investment Considerations - For cautious or value investors, exploring other opportunities may be advisable, while aggressive investors may find it a good time to invest in CoreWeave due to its access to Nvidia's latest GPUs and potential for long-term gains [13]

Nvidia Valuation & Growth - Nvidia's $4 trillion valuation is supported by strong data points, including Micron's better-than-expected HBM sales ramp-up [1] - The trend of spending more compute at the time of query, especially with OpenAI and Ceres, reinforces compute demand tied to inferencing, driving enthusiasm around Nvidia's runway [2] - Nvidia's revenue for the current year is projected to be $200 billion, even after accounting for the removal of China revenue [2] - Consensus estimates project Nvidia's revenue to grow to around $250 billion next year [3] - The stock price is just below $157 per share, with $164 per share needed to reach a $4 trillion market cap [3][4] Market Dynamics & Competition - Custom silicon from hyperscalers and competition from players like AMD pose a threat to Nvidia's current monopoly [5] - Nvidia's move to open up its platform and support other chips, including Broadcom gear, is a strategic response to competition and helps integrate with their NVLink [6] - The opening up of the ecosystem is a wise move as investments companies are making in Nvidia stack now can support some other chips [6] Long-Term Outlook - The question remains how long Nvidia can maintain its durable monopoly, given the various factors described [7] - Currently, Nvidia is executing very well [7]