This artificial intelligence (ai) stock has big tech partnerships and big potential

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This AI Stock Has Big Tech Partnerships and Big Potential

By Jeremy Bowman – July 13, 2025

Key Takeaways

• CoreWeave could be a major IPO story of 2025.
• Despite a weak market debut, its stock has seen significant gains.
• The company is experiencing explosive revenue growth, but investors should be aware of inherent risks.

Through July, AI infrastructure specialist CoreWeave (NASDAQ: CRWV) has captured attention as potentially the biggest initial public offering (IPO) of the year. While its market debut was notably underwhelming, priced lower than anticipated and requiring support from key partners like Nvidia buying a large position, the narrative shifted post-IPO.

Following a lackluster opening day performance where the stock failed to move significantly from its $40 IPO price, broad market sentiment towards AI stocks improved. This shift, coupled with receding concerns about economic headwinds, fueled a substantial rally in CoreWeave shares. The stock surged dramatically, reaching highs of $188 before a recent market pullback. Even with this retracement, the stock is trading significantly above its initial offering price, demonstrating renewed investor interest in the AI sector and CoreWeave's position within it.

What CoreWeave Does

CoreWeave's journey began differently, founded initially as an Ethereum mining operation called Atlantic Crypto. Recognizing the challenges of the 'crypto winter' between 2018 and 2019, the company wisely pivoted its business model. They discovered that the powerful GPUs (Graphics Processing Units) they owned, originally used for mining, were in high demand for computationally intensive tasks, particularly those powering artificial intelligence applications and models.

Today, CoreWeave is a dedicated provider of cloud computing infrastructure specifically designed for generative AI. Their core offering is the CoreWeave Cloud Platform, a sophisticated system combining proprietary software with robust cloud services. This platform is engineered to manage and deliver the specialized AI infrastructure needed to run the leading and most demanding AI models developed today.

A key differentiator for CoreWeave is its platform's singular focus on generative AI workloads. This specialization allows them to offer advantages over the more generalized cloud offerings from hyperscale giants like Microsoft, Amazon, and Alphabet, some of whom paradoxically are also CoreWeave's major customers. The CoreWeave platform is highlighted for its ability to deliver higher performance and greater uptime tailored for AI tasks, enabling customers to build, train, and deploy their AI models more rapidly and efficiently than they might on alternative, less specialized infrastructure.

Furthermore, CoreWeave benefits from a close, strategic relationship with Nvidia, the leading designer of the GPUs essential for AI computing. This relationship often positions CoreWeave as one of the first cloud providers to deploy Nvidia's newest AI instances – the specific configurations of computing resources optimized for AI. For instance, CoreWeave recently announced that it was the first company to make the Nvidia RTX PRO 6000 Blackwell Server Edition instances generally available. These cutting-edge instances offer significant performance improvements, achieving 5.6 times faster large language model inference compared to the previous generation, providing CoreWeave customers with a competitive edge.

CoreWeave's Key Partners and Relationships

One factor scrutinizing investors initially pointed out during CoreWeave's public offering was its customer concentration. The company's prospectus revealed that a significant portion of its 2024 revenue, specifically 62%, came from a single customer: Microsoft. While relying heavily on a few large clients can present a risk, CoreWeave's management has addressed this, stating in their first-quarter earnings report that no single company now accounts for more than 50% of its total backlog, indicating a broadening client base or more balanced contract distribution.

CoreWeave's client roster comprises a mix of innovative AI start-ups and established technology behemoths. Its customer base includes prominent names in the AI development space, such as Mistral, Cohere, and OpenAI, alongside major tech companies like Microsoft, Meta Platforms, Alphabet, IBM, and, importantly, Nvidia. The relationships with these industry leaders, particularly those who are also investors in CoreWeave, serve as a significant source of strength.

Nvidia, for instance, holds a substantial equity position in CoreWeave, owning 24.2 million shares, which are currently valued at approximately $3 billion. Similarly, OpenAI made a significant investment in CoreWeave in March, injecting $350 million into the company. This investment was coupled with a massive, multi-year service agreement under which OpenAI is slated to pay CoreWeave $11.9 billion over five years for its cloud infrastructure services. The fact that companies like Nvidia and OpenAI are both major customers and significant investors in CoreWeave creates a powerful, symbiotic relationship. These strategic alignments make it more likely that these key partners will continue to rely on CoreWeave for their AI infrastructure needs and actively support its ongoing business development, potentially leading to more stable revenue streams and continued access to cutting-edge hardware.

Why CoreWeave Has Big Potential

The demand for CoreWeave's specialized AI cloud infrastructure is translating directly into remarkable financial performance. Management reported blistering growth in the first quarter, with revenue soaring by an astonishing 420% year over year, reaching $981.6 million. This explosive growth clearly illustrates the surging demand for AI computing resources and demonstrates the company's capability to rapidly expand its capacity to meet this need.

The market for AI computing is widely expected to experience strong growth for many years, if not decades, to come. With its purpose-built platform and strategic partnerships, CoreWeave is exceptionally well-positioned to be a leading provider in this burgeoning market for AI cloud infrastructure. While the company is currently deeply unprofitable, this is largely a function of the massive capital expenditures required to acquire the vast quantities of high-end GPUs needed to build out its cloud platform and satisfy demand. For investors focused on long-term growth potential in a rapidly expanding market, investing aggressively when revenue is growing by triple-digit percentages can make strategic sense.

It is important for prospective investors to acknowledge that CoreWeave is not without risk. Valuing the stock accurately at this stage is complex, given its rapid growth, high capital costs, and the dynamic nature of the AI market. However, despite these risks and the fact that the stock has already more than tripled from its IPO price in a relatively short period, CoreWeave possesses considerable upside potential. Its unique positioning, strong partnerships with industry leaders, and demonstrated ability to capture market share in the high-demand AI infrastructure sector make it a compelling, albeit speculative, investment opportunity for those bullish on the future of artificial intelligence.