CoreWeave & Nvidia: A Most Peculiar Investment

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CoreWeave (CRWV +9.56%), a name that sounds suspiciously like a forgotten textile mill, went public nearly a year ago, back in March 2025. It’s become something of a focal point for those of us observing the artificial intelligence (AI) landscape – mostly because of its rather close relationship with Nvidia (NVDA +4.90%). Essentially, CoreWeave provides access to the computational muscle – and Nvidia’s rather shiny chips – that AI craves. This makes it, on the surface, an attractive proposition if you believe, as many do, that AI is going to continue its relentless march towards…well, something. (It’s still unclear what, exactly, AI will do with all this power. Organize sock drawers? Calculate the precise angle of existential dread? The possibilities are, frankly, terrifying.)

Nvidia, in a move that can only be described as ‘doubling down on the digital future,’ has recently injected another $2 billion into CoreWeave. This isn’t just pocket change, you understand. It’s enough to buy a small country, or at least a very large server farm. The market, predictably, has reacted with a surge, bumping CoreWeave’s stock up a respectable 26% since the start of the year. But should you join the fray? That, as they say, is the question.

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Does a Deeper Partnership with Nvidia Make CoreWeave a Safer Stock?

That additional $2 billion (approximately 23 million shares) effectively means Nvidia now holds a rather significant piece of CoreWeave, becoming the second-largest investor. The influx of capital will, naturally, allow CoreWeave to expand its capacity and build more data centers – those vast, humming cathedrals of computation. This positions them, in theory, for better growth opportunities as the AI boom continues. (Though one does wonder if we’re reaching a point of diminishing returns. How many data centers does one planet really need?) But whether this translates into a ‘safer’ investment is…debatable. CoreWeave, despite its impressive top-line growth, hasn’t quite managed to crack the code of profitability.

During the first nine months of 2025, revenue tripled to $3.6 billion – a figure that sounds impressive until you realize it was accompanied by a net loss of $715 million. That’s only a 12% improvement over the $812 million loss from the same period last year. It’s a bit like building a magnificent spaceship that constantly runs out of fuel. Impressive, certainly, but not terribly practical.

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CoreWeave’s Stock May Still Be Vulnerable to a Significant Correction

While CoreWeave’s stock has been enjoying a rather buoyant start to the year, investors would be wise to tread carefully. Its heavy reliance on Nvidia means its performance is inextricably linked to the tech giant’s fortunes. And, frankly, rather than using CoreWeave as a proxy for the AI boom, you might be better off simply investing in Nvidia itself. Just because a company has a smaller market cap doesn’t automatically mean it has more upside. It often means it has more…risk. (Think of it like choosing between a fully-fledged starship and a slightly-less-fully-fledged starship. Both can theoretically get you to Alpha Centauri, but one is statistically more likely to explode.)

Nvidia, it should be noted, has a history of investing in businesses that don’t always pan out. Take SoundHound AI, for example, in which Nvidia once held a stake. They ultimately divested, and SoundHound subsequently experienced a rather dramatic 50% crash last year. (A cautionary tale, perhaps, about the unpredictable nature of technological innovation. Or just bad luck. It’s often difficult to tell.)

Ultimately, it’s crucial to conduct your own thorough analysis before investing in any stock, rather than blindly following the moves of other investors or companies. And based on its current fundamentals – namely, its lack of profitability despite achieving monstrous growth – CoreWeave doesn’t appear to be a particularly promising investment. It’s a bit like trying to build a house on a foundation of…optimism. Admirable, perhaps, but structurally unsound.

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2026-02-06 18:02