Which Is the Better Artificial Intelligence (AI) Stock to Buy Right Now: CoreWeave or Nvidia?

Yahoo

6 days ago

Key Points
Both CoreWeave and Nvidia are growth superstars.
Both AI stocks look expensive at first glance, but their valuations need to be assessed in light of their growth prospects.
Which stock is the better pick to buy right now depends on your take on what's going to happen with AI demand.
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A hot IPO stock more than triples in its first few months on the market. A former high-flying stock rebounds from a steep sell-off to become the world's first $4 trillion company. Those are the stories for CoreWeave (NASDAQ: CRWV) and Nvidia (NASDAQ: NVDA) this year.
Investors who saw the potential in these two artificial intelligence (AI) stocks have reaped tremendous rewards. But which is the better pick to buy now?
Image source: Getty Images.
Two growth superstars
Anyone who has followed Nvidia for a while has become accustomed to sizzling growth. The graphics processing unit (GPU) maker's momentum continues. In the first quarter of fiscal 2026, Nvidia reported revenue of $44.1 billion, up 69% year over year.
The main negative of Nvidia's Q1 results was that its gross margin tumbled nearly 18% year over year. As a result, its earnings increased by 26%, a much slower pace than revenue. That's still an impressive jump, though.
There should be good news ahead for Nvidia. Its new Blackwell chips are selling hand over fist. The company expects increased profitability for these GPUs to drive gross margins higher. In addition, the U.S. government is allowing Nvidia to sell its H20 GPUs to China. The previous restriction against such sales led to a $4.5 billion charge that weighed on gross margins.
Meanwhile, CoreWeave reported revenue of $981.6 million in its first quarter as a publicly traded company, reflecting jaw-dropping, year-over-year growth of 420%. The demand for CoreWeave's AI cloud infrastructure is so great that the company is having to scramble to keep up with it.
CoreWeave's revenue backlog stood at $25.9 billion at the end of Q1. This figure included $11.2 billion from the company's deal with ChatGPT creator OpenAI.
However, CoreWeave remains unprofitable. And the capital spending required to expand capacity to support soaring demand is causing the company's bottom line to worsen. The picture looks better with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), though. CoreWeave's adjusted EBITDA jumped 477% year over year in Q1 to $606 million.
The valuation conundrum
Typically, the biggest knock against sizzling growth stocks is that their valuations can sometimes be too hot to handle. At first glance, this might seem to be true with both CoreWeave and Nvidia.