CoreWeave (CRWV) Stock Soars After Nvidia Discloses Stake

CoreWeave (NASDAQ:CRWV) shares surged 22% on May 16 and touched $80 after Nvidia Corp.’s (NASDAQ:NVDA) SEC filing (13G) revealed that it held around 24.2 million shares, or a 7% stake, as of March 31. Investors’ confidence in CoreWeave appears to have risen multi-fold after this disclosure, as the stake now is higher than the 5.2% stake known to the Street since the company filed its IPO prospectus.

IPO’ed just two months ago, CoreWeave Inc. (NASDAQ:CRWV) provides AI developers and enterprises with cloud-based graphics processing unit (GPU) infrastructure, primarily based on Nvidia GPUs. This relationship closely ties CoreWeave’s growth to advancements in the latter’s chips, enabling the company to offer customers the most advanced computing power. As a result, a greater backing from Nvidia corresponds to significant long-term potential for CoreWeave from AI infrastructure demand.

Just a day before this news, the company released stronger-than-expected Q1 2025 results with an impressive 420% and 550% year-over-year increase in revenue and adjusted operating income, respectively. Encouraged by the solid results in an otherwise volatile earnings season, JP Morgan analyst Mark Murphy raised his share price target by 54% to $66 (from $43), while maintaining his Overweight rating. The company announced some new deals, including one from a hyperscaler customer (speculated to be Google) and another $4 billion expansion from an AI company. The analyst hailed these deals as a welcome diversification of CoreWeave’s customer base and positive near-term growth catalysts. He likes the company’s strong revenue backlog and its focus on expanding enterprise customer base, which support his positive opinion on the company.

While we acknowledge the potential of CRWV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRWV and that has 100x upside potential, check out our report about the cheapest AI stock.

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