Following the end of each quarter, financial services firms that manage over $100 million in stocks are required to file a form 13F with the Securities and Exchange Commission (SEC). These filings represent an itemized breakdown of all the stocks that the fund bought and sold during the most recent quarter.

While investors may not realize it, corporations can also invest their cash into equity positions of other businesses. According to Nvidia‘s recent 13F filing, the semiconductor darling currently holds positions across six stocks. Two of its holdings are spread between artificial intelligence (AI) data center stocks, Nebius Group and CoreWeave (CRWV -3.50%).

Fresh off a hot initial public offering (IPO) earlier this year, CoreWeave has emerged as an integral player in the AI infrastructure market. Let’s dive into CoreWeave’s business and explore how the company is transforming the AI landscape.

What does CoreWeave do?

For the last few years, investors have learned about the important role that advanced chipsets known as graphics processing units (GPUs) play in the development of generative AI. The GPU market is largely dominated by Nvidia and Advanced Micro Devices, both of which are able to command hefty price tags for their coveted data center hardware.

While AI has served as an unprecedented tailwind for the chip market, one of the subtle nuances is that this demand has brought a series of complications to supply and demand dynamics.

This is where CoreWeave comes into play. CoreWeave operates as a “neocloud,” which is a specialized type of business that allows companies to access GPU architecture through cloud-based infrastructure. This flexible model appeals to businesses that may not be able to purchase GPUs directly from Nvidia or its cohorts due to rising price dynamics.

Image source: CoreWeave.

By offering an agile and potentially more affordable model than cloud hyperscalers such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform, CoreWeave has been able to attract a number of high-profile customers and ink a series of multiyear, billion-dollar deals.

What does CoreWeave’s growth look like?

For the quarter ended March 31, CoreWeave generated $982 million in revenue — up 420% year over year. While the company’s net loss widened more than twofold compared to the year-ago quarter, CoreWeave has some catalysts that should quickly turn around the dynamics of its profitability profile. See estimates in the chart below.

CRWV Revenue Estimates for Current Fiscal Year data by YCharts

During the earnings call, management raised guidance for both revenue and capital expenditures (capex). While more spending may stifle profitability in the short term, these investments are necessary foundations for the longer-term opportunity in AI infrastructure.

As Wall Street’s estimates pictured in the chart above showcase, CoreWeave’s investments today should help secure more access to Nvidia’s Blackwell GPU architecture and should ultimately serve as a tailwind for more accelerated growth down the road.

Image source: Getty Images.

Is CoreWeave stock a buy right now?

In the chart below, I compare CoreWeave to Oracle on a price-to-sales (P/S) basis. Oracle is also a leading player in infrastructure-as-a-service (IaaS), having just signed a $30 billion cloud deal of its own, so it’s comparable to CoreWeave. That single deal is expected to bring in nearly twice the amount of CoreWeave’s total 2027 revenue. And yet, investors are placing a twofold premium on CoreWeave’s P/S multiple when compared to Oracle.

CRWV PS Ratio data by YCharts

I think there are a couple of nuances to point out when it comes to CoreWeave’s valuation relative to a peer such as Oracle.

First, Oracle is experiencing a transition period — effectively replacing slow-growth (or no-growth) segments of the business with its new, budding data center infrastructure operation. For this reason, investors are likely applying a discount to Oracle relative to a high-growth AI stock such as CoreWeave.

Moreover, CoreWeave completed an IPO earlier this year. Since then, the company has inked an $11.2 billion deal with OpenAI, announced the planned acquisition of Core Scientific to bolster its platform, and earned a spot in some of Wall Street’s most respected institutional portfolios.

This confluence of factors is more than enough to garner outsize excitement and enthusiasm from investors. For these reasons, I’m not surprised to see CoreWeave trading at such a premium.

I think the most prudent course of action for investors is to buy CoreWeave stock at different price points over a long-term time horizon. If you invest the same amount of money at set time intervals, that is known as dollar-cost averaging, and can help mitigate risk by removing specific timing and price points from the equation.

Overall, I see CoreWeave as a compelling opportunity that is well positioned to dominate the infrastructure chapter of the AI narrative. If I could buy only one Nvidia-backed data center stock, CoreWeave would be it.