Investors in CoreWeave are experiencing a wave of optimism as the demand for the company’s AI-focused cloud infrastructure continues to surge. Known primarily for its operations of advanced artificial intelligence (AI) data centers across Europe and the U.S., CoreWeave is rapidly establishing itself as a formidable player in the cloud computing market. The latest boost comes from a significant multibillion-dollar contract, which promises to enhance its already impressive revenue growth trajectory.
CoreWeave has carved out a niche in the AI infrastructure market by leveraging the powerful graphics processing units (GPUs) from Nvidia. Major tech leaders, including Microsoft, Meta Platforms, and OpenAI, have expressed strong interest in CoreWeave’s offerings, driving increased demand for its data center capacity. Notably, CoreWeave secured a staggering $14.2 billion contract with Meta Platforms, further solidifying their partnership. Additionally, the firm boasts a $6.5 billion deal with OpenAI, contributing to a remarkable total of $22.4 billion in contracts from OpenAI alone this year.
In another key development, Nvidia has entered into a $6.3 billion agreement with CoreWeave, ensuring the company’s unsold data center capacity will be utilized through 2032. At the end of the second quarter, CoreWeave reported a robust $30.1 billion revenue backlog, which has now skyrocketed to over $50 billion, following the recent contracts.
This rapid expansion sets the stage for CoreWeave to compete closely with larger industry players like Oracle. While Oracle enjoys a significant backlog of $455 billion, CoreWeave’s swift ramp-up in capital expenditures indicates a strategic push to capture a larger share of the lucrative cloud AI infrastructure market. The company is projected to invest between $20 to $23 billion in capital expenditures in 2025, far exceeding its outlay of $8.3 billion in 2024. In contrast, Oracle plans a 65% increase, bringing its capex to $35 billion.
Such aggressive spending by CoreWeave supports its ambition to bolster its data center capabilities. The company recently reported an increase in contracted data center power capacity from 600 megawatts to an impressive 2.2 gigawatts. This growth enables CoreWeave to equip additional data centers with the necessary GPU technology to handle expanding AI workloads.
CoreWeave’s evolving capacity positions it to convert a larger portion of its significant backlog into revenue, attracting more clients as the demand for data center capacity continues to rise, forecasted to grow at an annual rate of 22% according to McKinsey research.
The company is well-poised for sustained growth, with projected revenue expected to almost triple this year. CoreWeave aims for revenue growth that could reach 3.4 times in just two years, eclipsing estimates from market leader Oracle. While Oracle anticipates its cloud infrastructure revenue to grow by 77% this fiscal year, CoreWeave’s substantial contracts, ongoing expansion efforts, and strategic positioning suggest it may outperform these expectations.
As CoreWeave capitalizes on its impressive revenue streams to invest further in data center technology, analysts recommend considering the company as a potential investment. Currently trading at 19 times sales, CoreWeave’s valuation is seen as competitive, especially in comparison to Oracle’s sales multiple of 14. Given its trajectory, CoreWeave is likely to emerge as a leading player in the cloud AI infrastructure sector, making for an enticing opportunity for investors.
