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Yahoo
25-06-2025
- Business
- Yahoo
CRWV vs. MSFT: Which AI Infrastructure Stock is the Better Bet?
CoreWeave CRWV and Microsoft Corporation MSFT both offer cloud infrastructure services for AI workloads. CoreWeave provides GPU-accelerated infrastructure for AI. Its cloud platform has been developed to scale, support and accelerate GenAI. Microsoft is both a major customer of CRWV and a competitor through Azure's AI services. So, if an investor wants to make a smart buy in the AI infrastructure space, which stock stands out? Let us delve a little deeper into the companies' strengths and weaknesses to see which is the better stock pick. CRWV works with NVIDIA Corporation NVDA to implement the latter's GPU technologies at scale. CoreWeave was one of the first cloud providers to deliver NVIDIA H100, H200 and GH200 clusters into production for AI workloads. The company's cloud services are also optimized for NVIDIA GB200 NVL72 rack-scale systems. CoreWeave now has a data center network with 33 data centers across the United States and Europe, supported by 420 megawatts of active power. CRWV is witnessing explosive revenue growth on strong AI demand. In the last earnings call, management highlighted that AI is forecasted to have a global economic impact of $20 trillion by 2030, while the total addressable market is anticipated to increase to $400 billion by 2028. In the last reported quarter, revenues of $981.6 million beat the Zacks Consensus Estimate by 15.2% and jumped 420% year over year. Apart from scaling capacity and getting adequate financing for infrastructure, CRWV is also expanding its go-to-market capabilities. Moreover, the buyout of the Weights and Biases acquisition has added 1,400 AI labs and enterprises as clients for CoreWeave. CRWV's strong backlog of $25.9 billion underscores its growing market share. This includes a strategic partnership with OpenAI for about $11.9 billion, while adding several new enterprise customers and a hyperscaler client. It has signed expansion agreements with many customers, including a $4 billion expansion with a big AI-enterprise customer. CRWV added that the $4 billion expansion agreement signed with a big AI client will be reflected in revenue backlog beginning in the current quarter. Nonetheless, the competitive landscape is the biggest concern. Also, higher capex can be a concern if revenues do not keep up the required pace to sustain such high capital intensity. CRWV expects capex to be between $20 billion and $23 billion for 2025 due to accelerated investment in the platform to meet customer demand. The company now guides interest expense to remain elevated, at $260-$300 million in the current quarter. CoreWeave's 77% of total revenues in 2024 came from the top two customers. This intense customer concentration is a major risk, especially if the client migrates, the revenue impact could be material. Apart from this evolving trade policy, macro uncertainty and volatility remain additional headwinds. Microsoft is one of the dominant names in the AI infrastructure space with its Azure platform, which also boasts a global data center coverage. Azure's increased availability in more than 60 announced regions globally is further strengthening the company's competitive position in the cloud computing market. Microsoft is investing aggressively in AI infrastructure, including building its own custom AI chips like Azure Maia and Azure Cobalt. In the last reported quarter, the company spent $21.4 billion on capex. It paid $16.7 billion for PP&E. MSFT highlighted that nearly half of the cloud and AI-related spend was on long-lived assets that will support monetization over the next 15 years and more. The remainder focused on servers (CPUs and GPUs) to fulfill rising AI demand, including a $315 billion customer backlog. Looking ahead to fiscal 2026, capex will grow at a slower rate than fiscal 2025, with a higher share of short-lived assets. Microsoft is the exclusive cloud provider to OpenAI, with all workloads hosted on the Azure platform. Its exclusive partnership with OpenAI gives Azure cloud priority access to leading AI models like GPT-4 Turbo, and DALL·E 3. MSFT is also embedding OpenAI's models directly into its services like Copilot, Azure and Bing. This vertical integration is aimed at creating cross-selling opportunities, allowing Microsoft to monetize AI across the stack. Another interesting development is Microsoft's NLWeb project which aims to turn websites into AI-powered applications. This open-source approach could drive adoption of Microsoft's underlying AI infrastructure while creating network effects that benefit the Azure platform. Microsoft projects revenues between $28.75 billion and $29.05 billion for the fourth quarter of fiscal 2025 for Intelligent Cloud, while for Azure, it expects revenue growth at constant currency between 34% and 35%. In Enterprise Services, revenues are forecasted to grow in mid-to-high single digits. Nonetheless, the competitive landscape remains a concern. In the past month, CRWV has skyrocketed 69% while MSFT is up 8%. Image Source: Zacks Investment Research MSFT currently carries a Zacks Rank #3 (Hold) while CoreWeave has a Zacks Rank #4 (Sell). In terms of Zacks Rank, MSFT appears to be the better pick at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Calgary Herald
14-06-2025
- Business
- Calgary Herald
Opinion: Don't panic: AESO data centre limits are a red herring
The Alberta Electric System Operator's new 1,200-megawatt cap on large electricity loads understandably has some people warning that Alberta might 'miss the AI economy.' That anxiety rests on an old assumption: that tomorrow's AI infrastructure will sit in ever-bigger, grid-tied campuses. Article content It did — five years ago. But today, the industry is running the other way and taking its money with it. Article content Article content Article content In March, Microsoft walked away from roughly two thousand megawatts of data-centre leases in the United States and Europe, telling analysts it now has 'oversupply' and needs a nimbler footprint. Yet, the company will still spend about US$80 billion on capacity this year — just not in hyperscale blocks wired to public grids, and certainly not at the end of long interconnection processes. Article content Article content Where is that money going? Increasingly to private, self-powered sites. Crusoe Energy, for instance, is building the first 200-megawatt phase of an off-grid watt-bit infrastructure campus near Abilene, Texas, to host OpenAI's 'Stargate' facility, fuelled by local natural gas rather than powered by the Texas grid. Such projects now exceed 10 thousand megawatts in global pipelines, and include some suppliers with roots here in Calgary's energy sector and capital market. Article content Article content The logic of it is simple. Cutting-edge AI chips can cost about $20 million per megawatt and age out in two years — roughly 100 times the capital intensity of a gas turbine that lasts decades. However, unlike a gas turbine, which might earn $50 to $75 per megawatt-hour in traditional power markets, a chipset like an NVIDIA H100 can turn that same megawatt-hour into nearly $4,000 — more than 65 times the commodity value of that same energy at Alberta's wholesale price. Article content When hardware that expensive and short-lived can earn more than 65 times the value of the energy it burns, operators will do almost anything to keep it running — and the regulatory, political and queuing risks that come with a public grid look less and less tolerable. Proposals that would require data centres to operate for the benefit of power grids make no economic sense to operators who do not share a low-margin, multi-decade view of the present value of energy.
Yahoo
12-06-2025
- Business
- Yahoo
CoreWeave Stock Skyrockets 137% in a Month: Hold or Fold?
CoreWeave, Inc. CRWV stock has gained 136.6% in the past month and closed last session at $149.70, jumping more than threefold from its initial opening price of $39. It has outperformed the 5.4% growth of the Zacks Internet Software industry and the 2.8% increase of the S&P 500 composite. The broader Computer and Technology sector has risen 5.2% over the same time frame. Image Source: Zacks Investment Research The company has outpaced its peers like Nebius Group N.V. NBIS, Microsoft MSFT and Amazon AMZN. Nebius, Microsoft and Amazon shares have gained 43.4%, 5.2% and 0.9%, respectively, in the same time frame. After the massive surge, investors are likely to contemplate what to do next, whether it is time to take profits or continue holding CRWV. The increasing demand for AI cloud platforms, including integrated software and infrastructure, bodes well for CRWV. The company highlighted that AI is forecasted to have a global economic impact of $20 trillion by 2030, while the total addressable market is anticipated to increase to $400 billion by 2028. In the last reported quarter, revenues of $981.6 million beat the Zacks Consensus Estimate by 15.2% and jumped 420% year over year. Management inked a strategic partnership with OpenAI for about $11.9 billion, while adding several new enterprise customers and a hyperscaler client. It has signed expansion agreements with many customers, including a $4 billion expansion with a big AI-enterprise customer. CRWV added that the $4 billion expansion agreement signed with a big AI client will be reflected in revenue backlog beginning in the current quarter. CoreWeave now boasts a growing data center network with 33 data centers across the United States and Europe, supported by 420 megawatts of active power. Moreover, the buyout of the Weights and Biases acquisition has added 1,400 AI labs and enterprises as clients for CoreWeave. CRWV also works with NVIDIA Corporation to implement the latter's GPU technologies at scale. CoreWeave was one of the first cloud providers to deliver NVIDIA H100, H200, and GH200 clusters into production for AI workloads. The company's cloud services are also optimized for NVIDIA GB200 NVL72 rack-scale systems. Driven by healthy momentum, CRWV expects full-year 2025 revenues to be between $4.9 billion and $5.1 billion. Adjusted operating income is forecasted to be between $800 million and $830 million. For the second quarter, CRWV projects revenues to be between $1.06 billion and $1.1 billion. Adjusted operating income is forecasted to be between $140 million and $170 million. CoreWeave faces tough competition in the AI cloud infrastructure space, which boasts behemoths like Amazon and Microsoft and other players like Nebius. Amazon Web Services and Microsoft's Azure cloud platform together dominate more than half of the cloud infrastructure services market. CRWV expects capex to be between $20 billion and $23 billion for 2025 due to accelerated investment in the platform to meet customer demand. The company anticipates stock-based compensation to remain slightly higher in 2025 for the grants issued pertaining to the IPO. Higher capex can be a concern if revenues do not keep up the required pace to sustain such high capital intensity, especially in a macro environment where AI demand cycles could fluctuate due to competitive pricing and regulatory changes. High interest expenses could weigh on profitability. In the first quarter, interest expense came in at $264 million, topping expectations. This was attributed to changes in vendor payment terms. The company now guides interest expense to remain elevated, at $260-$300 million in the current quarter. Higher interest expenses can exert pressure on the adjusted net income and potentially affect free cash flow generation. CoreWeave's 77% of total revenues in 2024 came from the top two customers. This intense customer concentration is a major risk, especially if the client migrates, the revenue impact could be material. Apart from this evolving trade policy, macro uncertainty and volatility remain additional headwinds. CRWV currently carries a Zacks Rank #3 (Hold), which indicates that existing investors can hold the stock as its growth prospects remain intact. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Staying invested in CRWV stock appears prudent for now due to its strong revenue growth prospects amid surging demand for AI-focused cloud infrastructure. Strategic partnerships with major players like OpenAI and NVIDIA bode well. The company's massive $259 billion revenue backlog and expanding data center footprint position it well for sustained growth. While near-term headwinds such as elevated capital expenditures and customer concentration pose risks, CRWV's specialized AI-optimized platform provides a distinct competitive advantage. However, intensifying competition from tech giants remains a key concern. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
28-05-2025
- Business
- Yahoo
CoreWeave vs. Nebius: Which AI Infrastructure Stock Is the Better Buy?
CoreWeave, Inc. CRWV and Nebius Group N.V. NBIS are emerging AI-focused cloud infrastructure providers positioning themselves as agile alternatives to traditional hyperscalers like Amazon Web Services and Azure, aiming to capitalize on the growing demand for AI cloud solutions. The rapid proliferation of AI is transforming the entire tech scene, and AI infrastructure has become a high-stakes battleground for tech companies. Per an IDC report, spending on AI infrastructure is expected to top $200 billion by 2028. This uptrend in spending benefits both CoreWeave and Nebius, but not equally. So, if an investor wants to make a smart buy in the AI infrastructure space, which stock stands out? Let us delve a little deeper into the companies' strengths and weaknesses to see which is the better stock pick? CoreWeave is an AI-focused hyperscaler company, and its cloud platform has been developed to scale, support, and accelerate GenAI. Businesses have been increasing spending on AI inference/fine-tuning, AI workload monitoring, and training infrastructure, including training compute, AI servers, AI storage, cloud workloads and networking. This increasing demand for AI cloud platforms, including integrated software and infrastructure, bodes well for CRWV. In the last reported quarter, revenues of $981.6 million beat the Zacks Consensus Estimate by 15.2% and jumped 420% year over year. In the first quarter earnings call, CRWV highlighted that AI is forecasted to have a global economic impact of $20 trillion by 2030, while the total addressable market is anticipated to increase to $400 billion by 2028. It recently unveiled the next generation of its CoreWeave AI object storage. This is purpose-built for training and inference, offering a production-ready, scalable solution integrated with Kubernetes. Apart from scaling capacity and getting adequate financing for infrastructure, CRWV is also expanding its go-to-market capabilities. Moreover, the buyout of the Weights and Biases acquisition has added 1,400 AI labs and enterprises as clients for CoreWeave. CoreWeave now has a data center network with 33 data centers across the United States and Europe, supported by 420 megawatts of active power. CRWV also works with NVIDIA Corporation NVDA to implement the latter's GPU technologies at scale. CoreWeave was one of the first cloud providers to deliver NVIDIA H100, H200, and GH200 clusters into production for AI workloads. The company's cloud services are also optimized for NVIDIA GB200 NVL72 rack-scale systems. Nonetheless, management's commentary surrounding higher capital expenditures and high interest expenses is likely to have unnerved investors. CRWV expects capex to be between $20 billion and $23 billion for 2025 due to accelerated investment in the platform to meet customer demand. Higher capex can be a concern if revenue does not keep up the required pace to sustain such high capital intensity. High interest expenses could weigh on profitability. In the first quarter, interest expense came in at $264 million, topping expectations. The company now guides interest expense to remain elevated, at $260-$300 million in the current quarter. CoreWeave's 77% of total revenues in 2024 came from the top two customers. This intense customer concentration is a major risk, especially if the client migrates, the revenue impact could be material. Apart from this evolving trade policy, macro uncertainty and volatility remain additional headwinds. Nebius posted 385% year-over-year revenue growth in the first quarter of 2025, driven by accelerating demand for its AI infrastructure services. NBIS is focusing on technical enhancements that increase reliability and reduce downtime to boost customer retention. In the first quarter, Nebius significantly upgraded its AI cloud infrastructure through improvements to its Slurm-based cluster. These enhancements included automatic recovery for failed nodes and proactive system health checks designed to identify issues before they impact jobs. This directly lowers downtime and boosts capacity availability. According to the company, these changes led to an estimated 5% improvement in the availability of nodes for commercial use. Nebius is making substantial investments in improving its object storage capabilities, and the upgraded storage system ensures that big data sets can be easily accessed and saved quickly during model training, directly lowering time-to-result for end users. NBIS successfully graduated multiple platform services like MLflow and JupyterLab Notebook from beta to general availability. Nebius expanded integrations with external AI platforms like Metaflow, D Stack and SkyPilot, enabling customers to migrate tools with nominal friction. Nebius is focusing on building a global footprint, with capacity in the United States, Europe, and the Middle East. It added three new regions, including a strategic data center in Israel, in the last reported quarter. Like CoreWeave, NBIS' partnership with NVDA (also an investor in the company) is another plus. Nebius will be one of the first AI cloud infrastructure platform to offer the NVIDIA Blackwell Ultra AI Factory Platform and become a launch partner for NVIDIA Dynamo. Nonetheless, the intense competition from behemoths remains a concern, along with profitability issues. Despite its exceptional top-line growth, NBIS remains unprofitable, with management reaffirming that adjusted EBITDA will be negative for the full year 2025. Though it added that adjusted EBITDA will turn positive at 'some point in the second half of 2025.' Like CoreWeave, NBIS has also raised its 2025 capital expenditure forecast to approximately $2 billion from the previous estimate of $1.5 billion, primarily due to some planned fourth-quarter spending shifting into early first quarter. In the past month, CRWV has skyrocketed 189.6% while NBIS has surged 66.9%. Image Source: Zacks Investment Research Currently, the stocks carry a Zacks Rank #3 (Hold) each. While both CoreWeave and Nebius are aggressively scaling to capture the surging demand for AI infrastructure, NBIS appears to be the more compelling investment opportunity at this stage. Despite its ongoing investments and negative EBITDA in the near term, NBIS's full-stack AI cloud platform and expanding global footprint position it well for growth. NBIS is relatively better placed than CRWV, although both appear to be on a level playing field in terms of Zacks Rank. Consequently, NBIS seems to be a better pick at the moment. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Nebius Group N.V. (NBIS) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-05-2025
- Business
- Yahoo
How Should You Play CoreWeave Stock Going Into Q1 Earnings?
CoreWeave, Inc. CRWV will report its first-quarter 2025 results on May 14, after market close. The Zacks Consensus Estimate for the bottom line in the to-be-reported quarter is pegged at a loss of 21 cents. The estimate has been unchanged in the past seven days. The consensus estimate for total revenues is pinned at $850.4 million. Image Source: Zacks Investment Research This is CoreWeave's first earnings release since it started trading as a listed company on March 28, 2025. (See the Zacks Earnings Calendar to stay ahead of market-making news). Our proven model does not conclusively predict an earnings beat for CRWV this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. CRWV has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here. CoreWeave is an AI-focused hyperscaler company. CRWV's cloud has been developed to scale, support, and accelerate GenAI. CoreWeave also boasts a growing data center network across the United States and Europe. CRWV also highlights that its infrastructure and cloud services are purpose-built and highly optimized for AI workloads, unlike traditional cloud providers whose solutions were originally designed for web-scale applications and are hindered by legacy architectures. CRWV also works with NVIDIA Corporation NVDA to implement the latter's GPU technologies at scale. CoreWeave was one of the first cloud providers to deliver NVIDIA H100, H200, and GH200 clusters into production for AI workloads. CoreWeave's cloud services are also optimized for NVIDIA GB200 NVL72 rack-scale systems. The rapid AI proliferation is transforming the entire tech scene, and AI infrastructure has become a high-stakes battleground for tech companies. Businesses have been increasing spending on AI inference/fine-tuning, AI workload monitoring, and training infrastructure, including training compute, AI servers, AI storage, cloud workloads and networking. This increasing demand for AI cloud platforms, including integrated software and the infrastructure, is likely to have cushioned CRWV's topline performance. CoreWeave's cloud Platform is hosted on a distributed network of active data centers. These data centers are connected to key metropolitan areas using low-latency connections and boast cutting-edge data center networking equipment and the latest liquid cooling technologies. As of Dec 31, 2024, CRWV's 32 data centers were running more than 250,000 GPUs and were supported by more than 360 MW of active power. In May 2025, CRWV completed the acquisition of Weights & Biases to further bolster its cloud platform and expand business operations. Before that, it entered into an agreement with several financial institutions, including JP Morgan and Wells Fargo, for the expansion of its credit facility from $650 million to $1.5 billion and pushing out the maturity date. CRWV plans to utilize the proceeds to strengthen its AI cloud infrastructure platform. CoreWeave faces tough competition in the AI cloud infrastructure space, which boasts behemoths like Amazon AMZN, Microsoft MSFT and Alphabet. Amazon Web Services and Microsoft's Azure cloud platform together dominate more than half of the cloud infrastructure services market. This is likely to have acted as a headwind. CoreWeave's 77% of total revenues in 2024 came from top two customers. This intense customer concentration is a major risk, especially if the client migrates, the revenue impact could be material. CRWV shares have gained 34% in the past month. It has significantly outperformed the 12.8% gain of Zacks Internet Software industry and the 4.3% of the S&P 500 composite. The broader Computer and Technology Sector has risen 6.5% over the same time frame. Image Source: Zacks Investment Research The company has outpaced its peers like Microsoft and Amazon. Microsoft and Amazon shares have gained 15.8% and 14.6%, respectively, in the same time frame. The AI infrastructure market continues to expand rapidly in 2025, driven by demand for GPU-intensive applications, including large language models and inference-at-scale workloads. This bodes well for CRWV. Despite a robust market, CoreWeave faces tremendous competition from Azure, AWS and Google Cloud. Also, customer concentration and huge capex owing to data center expansion remain headwinds. With strong demand tailwinds, it seems a compelling opportunity, but one with competitive pressures and capital risks that investors need to closely monitor. CRWV currently carries a Zacks Rank #3, which indicates that investors should wait for a better entry point. However, existing investors can hold the stock as its growth prospects remain intact. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Inc. (AMZN) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report CoreWeave Inc. (CRWV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
