Move Over Nvidia, Taiwan Semiconductor, and Micron. Brad Gerstner's Altimeter Capital Just Gave Investors 2,999,536 Reasons to Check Out the Hottest Artificial Intelligence (AI) IPO Stock of 2025
As is the case with many investment funds, Altimeter has made artificial intelligence (AI) stocks a core feature of its portfolio in recent years. According to its most recent 13F filing, Altimeter trimmed its stake in Nvidia during the first quarter while completely dumping its stakes in Micron and Taiwan Semiconductor Manufacturing.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
Interestingly, though, I discovered that Altimeter holds a position in red-hot AI IPO stock CoreWeave(NASDAQ: CRWV). This comes from an investment Altimeter made when CoreWeave was still a private company. As of the close of trading on June 4, Altimeter's 2,999,536 shares were worth about $489 million
Let's explore some of the core themes in the ongoing AI revolution to try and discern what may have motivated these moves. From there, I'll break down CoreWeave's business and recent price action to help determine if the stock is a good buy right now.
Why sell Nvidia, Micron, and Taiwan Semi stock right now?
Considering how robust demand has been for high-end graphics processing units (GPU) and memory storage chips, reducing exposure to names such as Nvidia, Micron, and Taiwan Semi looks like a head-scratcher on the surface. However, this is not the first time that Gerstner has shown some contrarian characteristics in his investment style.
While I cannot say for certain what Altimeter's current thesis is regarding chip stocks or the AI movement more broadly, I've come up with some reasons that may help justify the fund's recent moves.
According to industry estimates, Nvidia currently controls roughly 90% (or more) of the data center GPU market. While a lead like that might suggest Nvidia's moat is insurmountable, there are some risks to consider. First, Nvidia's revenue sources are heavily concentrated among cloud hyperscalers such as Amazon, Alphabet, and Microsoft.
Each of these companies has been developing their own custom AI chips, potentially signaling their intentions to migrate away from Nvidia's architecture over time. When you layer on top that the fact that Advanced Micro Devices has steadily been gaining momentum in the data center arena -- as its deals with Oracle, Microsoft, and Meta Platforms demonstrate -- Nvidia's growth could be on course for some deceleration.
Lastly, one of the storm clouds hanging over Nvidia at the moment is its exposure to China. New U.S. export controls and President Donald Trump's tariffs could cut into its sales there.
Micron operates in a unique pocket of the AI realm. It specializes in memory storage chips, which are vital hardware for data centers, personal computers, and smartphones, among other technologies. With that said, memory chips are relatively commoditized. On top of that, a shift toward cloud-based AI infrastructure could potentially serve as a headwind for Micron's hardware-centric chip memory business.
Taiwan Semiconductor specializes in fabrication services -- its foundries are where chips designed by Nvidia, AMD, Broadcom, and a host of others are actually manufactured. While demand for GPUs and other types of AI chips is strong, a deceleration in sales growth from key customers (i.e., Nvidia) could trickle down to TSMC's business, too.
Furthermore, most of TSMC's factories are located in Taiwan. Given the ongoing geopolitical pressures Taiwan faces from China, it's possible that U.S. chip designers like AMD or Nvidia could begin to turn to alternative foundry providers such as Intel.
What does CoreWeave do?
CoreWeave is a cloud computing infrastructure provider that offers its clients access to Nvidia GPUs and a host of other chip integrations. As such, its business is not as exposed to the time it takes to design and manufacture sophisticated hardware -- unlike the names explored above. In a way, this makes the hyperscaler more nimble than other chip and data center stocks, allowing the company to scale at a faster pace.
CoreWeave is able to take advantage of the booming chip landscape but more so on the AI training and inferencing side. Ultimately, it fills the gap between producing chipsets and accessing optimized AI cloud infrastructure.
It's not that Nvidia, Micron, or TSMC are poor investment choices right now. It's simply that those businesses might be reaching levels of maturity, whereas CoreWeave's model could be in the early phases of exponential expansion.
Is CoreWeave stock a good buy right now?
The chart below illustrates how CoreWeave's price-to-sales (P/S) ratio has progressed since its initial public offering (IPO) earlier this year.
There are a couple of big takeaways from this chart. First, it's clear that CoreWeave has experienced notable valuation expansion. In my view, outsize momentum is propelling CoreWeave stock right now -- and buying in the wake of its recent climb could leave you as an unsuspecting bag holder.
In addition, CoreWeave's P/S multiple is almost fourfold that of Oracle -- which also provides core data center infrastructure services. Oracle is a mature, profitable business, unlike CoreWeave's high-cash-burn operation.
While I understand the thesis behind CoreWeave's value proposition in the AI landscape, I think the stock is overbought right now. I would pass on investing at its current valuation, but would keep tabs on the company and its growth prospects.
Should you invest $1,000 in CoreWeave right now?
Before you buy stock in CoreWeave, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you'd have $668,538!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you'd have $869,841!*
Now, it's worth notingStock Advisor's total average return is789% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you joinStock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 2, 2025
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Intel, Meta Platforms, Microsoft, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
3 hours ago
- Globe and Mail
UPS vs. Whirlpool: 2 High-Yield Stocks That Crashed, but Only one Is a Buy
Key Points Both UPS and Whirlpool's stocks are on multiyear downtrends, raising their yields. Whirlpool has cut its dividend in response, but UPS hasn't. However, UPS will likely feel a bigger negative impact from tariffs. 10 stocks we like better than United Parcel Service › Do you like bargain-priced stocks? How about bargain-priced dividend stocks? How about bargain-priced dividend stocks that you've actually heard of? Well, you're in luck! The stocks of two iconic American brands are currently sitting in the bargain bin. The companies are shipping behemoth UPS (NYSE: UPS) and appliance maker Whirlpool (NYSE: WHR). Both stocks have been slowly sinking for years, with share prices now down more than 60% from their all-time highs! Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Both stocks fell again -- by more than 15% -- after their recent second-quarter earnings reports, but one looks more likely to recover. Only one cut its dividend Both UPS and Whirlpool have long histories of paying and regularly increasing their dividends. By July, their share-price slumps had pushed both of their dividend yields above 7%. A yield that high is tempting, but neither company was on track to generate enough free cash flow to cover it. When a company can't cover its dividend with free cash flow, it has to dip into the cash on its balance sheet, take on additional debt, or find some other way to fund the payout. UPS is going to try to make it work somehow, according to CEO Carol Tome on the Q2 earnings call. She told investors, "You have our commitment to a stable and growing dividend." That means the company will be on the hook for at least $5.5 billion in dividend payouts this year, which seems almost certain to exceed its free cash flow for the year. That keeps UPS's yield high for now, but investors should remember that there's no guarantee the company's position won't change without warning, resulting in a surprise dividend cut. Whirlpool, on the other hand, cut its annual payout in half from $7 per share to $3.50 per share. That means its yield is now much lower than UPS's (4% vs. 7.5%), but its $190 million total payout is also much more manageable, making its dividend more sustainable over the long term. It also means the dividend cut is baked into the company's current share price, whereas if UPS makes a cut, its stock price will probably sink even lower in response. The ups and downs of tariffs UPS and Whirlpool are both bracing for the impact of tariffs, but in different ways. For UPS, the tariffs are a huge risk. They will likely cause imports to decline, resulting in lower shipping volumes. With some tariffs kicking in just as the labor market shows signs of weakness, they could negatively impact overall consumer spending (and thus, shipping) during the critical holiday shopping season. On the other hand, the tariffs may actually help Whirlpool by hurting its foreign competitors like LG, Samsung, and Haier. The Trump administration has proposed high tariffs on countries that happen to export lots of large appliances to the U.S. These include South Korea (25%), Thailand (36%), Vietnam (46%), and China (as high as 145%). Many of these rates are in flux, but even if they end up at 10% or 15%, it will still give Whirlpool, which manufactures more than 80% of its products in the U.S., a big pricing advantage. Although UPS's yield may now be higher than Whirlpool's, its prospects are looking dimmer thanks to economic factors outside of its control. Meanwhile, even after its dividend cut, Whirlpool still offers a decent yield and a compelling valuation. If I were to pick one, I'd go with Whirlpool hands down. Should you invest $1,000 in United Parcel Service right now? Before you buy stock in United Parcel Service, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and United Parcel Service wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,106,071!* Now, it's worth noting Stock Advisor's total average return is 1,070% — a market-crushing outperformance compared to 184% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025
Globe and Mail
3 hours ago
- Globe and Mail
Better Fintech Stock: Upstart vs. SoFi Technologies
Key Points Upstart's growth is accelerating again as interest rates decline. SoFi will benefit from lower rates and resumed student loan payments. The pricier stock is still the better long-term pick. 10 stocks we like better than Upstart › Upstart (NASDAQ: UPST) and SoFi Technologies (NASDAQ: SOFI) are both growing fintech companies. Upstart's online lending marketplace uses AI to crunch non-traditional data points to approve a wider range of loans than traditional credit-scoring services. SoFi is challenging traditional banks as a one-stop digital shop for myriad financial services. Upstart went public via a traditional IPO at $20 on Dec. 16, 2020, and it now trades at $63. SoFi went public by merging with a special purpose acquisition company (SPAC) on June 1, 2021. Its stock opened at $21.97, but it now trades at roughly $23. Let's see why investors embraced Upstart but shunned SoFi -- and if that trend will continue. Upstart's growth is warming up again Upstart's platform approves loans for banks, credit unions, and auto dealerships. Instead of reviewing traditional data like an applicant's FICO score, credit history, or annual income, it uses its AI algorithms to analyze non-traditional data points -- which can include previous jobs, standardized test scores, and GPA -- to approve a broader range of loans for younger and lower-income applicants with limited credit histories. It fully automates most of those approvals. Upstart's growth can be measured through its originated loans, conversion rate (the ratio of total inquiries leading to approved loans), and contribution margin (the ratio of its fees it retains as revenue). Here's how it fared over the past five years. Metric 2020 2021 2022 2023 2024 Originated loans growth 40% 338% (5%) (59%) 28% Conversion rate 15% 24% 14% 10% 16.5% Contribution margin 46% 50% 49% 63% 60% Revenue growth 42% 264% (1%) (39%) 24% Data source: Upstart. In 2022 and 2023, Upstart's growth decelerated as soaring rates chilled the market's demand for new loans. Many lenders also cautiously reined in their own offerings. But as Upstart's top-line growth slowed down, its contribution margin improved as it automated more loans and locked in a higher mix of "super prime" borrowers to boost its take rate for each loan. In 2024, its growth accelerated again as interest rates declined. From 2024 to 2027, analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 36% and 245%, respectively. Those are robust growth rates for a stock that trades at just 22 times next year's adjusted EBITDA. SoFi's growth is still cooling off SoFi provides a wide range of loans, insurance policies, estate planning services, credit cards, banking services, and stock trading tools. It obtained a U.S. bank charter in 2022, and it operates as a digital-only direct bank that doesn't run any brick-and-mortar branches. That streamlined approach enabled SoFi to expand at a much faster rate than traditional banks, as seen in its growth in members, total financial products in use, and total revenue over the past four years. Its adjusted EBITDA margin also expanded from 3% in 2021 to 26% in 2024. Metric 2021 2022 2023 2024 Members 2.5 million 5.2 million 7.5 million 10.1 million Products in use 1.9 million 7.9 million 11.1 million 14.7 million Revenue growth 74% 60% 35% 26% Data source: SoFi Technologies. However, the temporary suspension of student loan payments from 2020 to 2023, rising interest rates, and other macro headwinds throttled SoFi's growth. It also faces tougher competition from "neobanks" like Chime and Robinhood Markets, dedicated lending platforms like Upstart, and expanding fintech giants like PayPal. On the bright side, two of those headwinds are dissipating. The freeze on SoFi's student loan payments has ended, and interest rates will likely keep declining. From 2024 to 2027, analysts expect SoFi's revenue and adjusted EBITDA to grow at a CAGR of 25% and 37%, respectively. That bright outlook implies that while SoFi's hypergrowth days might be over, it should continue to grow at an impressive rate as it gains even more members, expands its ecosystem with fresh features, and profits from the expansion of its fintech subsidiary Galileo, which it acquired in 2020 and now serves nearly 160 million accounts on its own. Like Upstart, SoFi's stock also looks cheap relative to its growth potential at 19 times next year's adjusted EBITDA. The winner: Upstart Upstart and SoFi are both promising fintech stocks. But if I had to choose one over the other, I'd buy Upstart because it's growing faster, experiencing accelerating growth (instead of just stabilizing growth), and faces fewer direct competitors. SoFi still has to prove it can maintain its edge against its growing list of competitors. Should you invest $1,000 in Upstart right now? Before you buy stock in Upstart, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Upstart wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,106,071!* Now, it's worth noting Stock Advisor's total average return is 1,070% — a market-crushing outperformance compared to 184% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025
Globe and Mail
3 hours ago
- Globe and Mail
If You'd Invested $1,000 in Palantir Stock 5 Years Ago, Here's How Much You'd Have Today
Key Points Palantir Technologies offers the decision-making software that makes AI data centers worth their cost. Although a handful of companies are in this software space, Palantir is the market leader. While it's unlikely Palantir stock will perform as well again during the coming five years, it's still a stellar growth prospect. 10 stocks we like better than Palantir Technologies › Nvidia 's hardware is still the power behind most artificial intelligence (AI) data centers. But hardware is only half the story. Users also need a way to put that computing power to work. That's where software comes in. And while there are several AI-powered decision-making solutions available, the ones from Palantir Technologies (NASDAQ: PLTR) are arguably the best. That's why this stock's performed so well since the AI movement went into high gear about five years ago. Leading the AI industry's growth If you've not kept close tabs on the AI industry's explosive growth, but the name still rings a bell, it might be because the U.S. Department of Health and Human Services asked Palantir for help managing the monumental task of combating the spread of the COVID-19 pandemic, including the distribution of coronavirus vaccines. That's not all the company's tech is capable of, to be clear. Factories, financial firms, logistics outfits, and the military all benefit from its solutions. It was the COVID-19 pandemic, however, that put Palantir on the proverbial map and jump-started its explosive growth. To this end, had you made a mere $1,000 investment in Palantir Technologies stock right after its September 2020 initial public offering, today that position would be worth just a little over $19,000. Tough act to follow, but... That's an unusually big run-up -- even for a game changer like Palantir. But it's a well-deserved advance. Annualized revenue has grown from a little over $1 billion then to roughly $4 billion now. Just don't look for a repeat of this feat over the course of the coming five years. Still, that doesn't mean Palantir shares aren't worth owning here. The AI business is still young, and plenty of organizations don't even yet realize they need this company's tech. In this vein, an outlook from Straits Research suggests the decision-making software market is set to grow at an annualized pace of 16% through 2031. Palantir Technologies is well-positioned to win at least its fair share of this growth. Should you invest $1,000 in Palantir Technologies right now? Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $668,155!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,106,071!* Now, it's worth noting Stock Advisor's total average return is 1,070% — a market-crushing outperformance compared to 184% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025
