Better Artificial Intelligence (AI) Stock: CoreWeave vs. Nebius
Nebius and CoreWeave have been in red-hot form on the stock market this year thanks to the terrific demand for their cloud infrastructure solutions.
Both companies seem to be able to sustain their impressive growth in the long run, thanks to the lucrative AI-related market that they are serving.
10 stocks we like better than CoreWeave ›
CoreWeave (NASDAQ: CRWV) and Nebius Group (NASDAQ: NBIS) have witnessed a rapid jump in their share prices this year. Investors have been buying these stocks hand over fist because they are benefiting big time from the growing demand for cloud-based artificial intelligence (AI) infrastructure.
CoreWeave stock has shot up a remarkable 224% in just four months since going public in March this year, and Nebius has clocked healthy gains of 84% so far in 2025. Both companies are in the business of renting out data centers powered by graphics processing units (GPUs), which their customers use to train AI models, build applications, and scale up those applications in the cloud.
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 »
But if you have to choose one of these two stocks for your portfolio right now, which one should it be? Let's find out.
The case for CoreWeave
CoreWeave's rally since its initial public offering (IPO) can be attributed to the terrific growth in the company's revenue and backlog. Its top line jumped by more than fivefold in the first quarter to $981 million, and it's on track to sustain its outstanding momentum.
That's because the cloud infrastructure-as-a-service market in which CoreWeave operates is growing at an incredible pace. Grand View Research estimates that the cloud AI market could generate $650 billion in annual revenue in 2030, nearly 7.5 times the size of this market last year. CoreWeave is capitalizing on this lucrative opportunity by offering access to the top-of-the-line GPUs from Nvidia along with server processors from AMD.
The company claims that customers using its cloud AI infrastructure enjoy significant cost and performance advantages. It says its infrastructure is "purpose-built for compute-intensive workloads, and everything from our servers to our storage and networking solutions are designed to deliver best-in-class performance."
The demand for the company's AI infrastructure is outpacing supply, so it is focused on scaling up its capacity quickly to satisfy the strong demand. Management said on its May earnings conference call that it has raised over $21 billion to expand infrastructure and data center capacity.
The company recently announced the upcoming $9 billion acquisition of Core Scientific, which could bring another 1 gigawatt (GW) of data center capacity and help lower its costs from its existing leases with Core Scientific.
CoreWeave forecasts a reduction of over $10 billion in future lease liabilities once the acquisition is complete, followed by annual run-rate cost savings of $500 million by the end of 2027. Before this acquisition was announced, CoreWeave was projecting a fourfold increase in its data center capacity under its existing capacity contracts.
This focus on enhancing data center capacity should pave the way for outstanding growth for CoreWeave since it was sitting on a revenue backlog of almost $26 billion at the end of the first quarter -- 63% higher from the year-ago period. As such, analysts are expecting its revenue to continue increasing at a strong pace.
CRWV Revenue Estimates for Current Fiscal Year; data by YCharts.
CoreWeave is likely to remain a top AI stock since it is serving a fast-growing market and is investing aggressively to capture a share of it.
The case for Nebius
Nebius shot up impressively last week after Goldman Sachs put a 12-month price target of $68 on the stock. The investment bank said that the company's full-stack AI infrastructure, which includes hardware and software tools, allows it to make the most of the impressive opportunity in this space.
Goldman's price target calls for a 31% jump in the stock in the coming year. And there is a good chance that the company could surpass that given its 385% revenue jump year over year in the first quarter to $55 million. More importantly, the growth in its annual revenue run rate was much faster at 684% year over year to $249 million.
That improved to $310 million in April, and the company forecasts an annual revenue run rate of $750 million to $1 billion by the end of the year, driven by the new data center capacity it is planning. In a letter to shareholders, CEO Arkady Volozh said:
We are rapidly expanding our capacity footprint. In just three quarters, we've gone from one location in Finland to five locations across Europe, the U.S., and now the Middle East. We are actively exploring new sites in the U.S. and around the world, and we expect to provide more news on this soon.
Unlike CoreWeave, Nebius provides more than just AI hardware infrastructure to customers. Its cloud platform also offers developer tools and services that customers can employ to refine their AI models, run inference tasks, and develop custom solutions. This is why Goldman believes that Nebius could be a leader in the cloud AI space.
The company's balance sheet -- with $1.45 billion in cash and $188 million in debt -- allows it to continue putting more money into its cloud infrastructure. This explains the healthy top-line growth it is projected to deliver.
NBIS Revenue Estimates for Current Fiscal Year; data by YCharts.
So, like CoreWeave, Nebius is likely to remain a high-growth company. But is it a better buy than its larger peer at this point?
The verdict
Both CoreWeave and Nebius are growing at healthy rates and are expected to sustain that. So, investors should look at their valuations to decide which is the better buy.
The two companies aren't profitable right now considering their aggressive infrastructure investments, so we need to compare their price-to-sales ratios (P/S).
NBIS PS Ratio (Forward); data by YCharts.
Nebius stock is way more expensive than CoreWeave when comparing sales multiples, indicating that the latter is a better buy even after its strong rally this year. Moreover, CoreWeave is growing faster, has a huge backlog, and is sitting on ample resources to continue expanding its data center footprint, making it the easy choice for investors considering which of these two AI stocks is worth adding to their portfolios right now.
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 when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!*
Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% 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 July 21, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
Trump's new tariffs go into effect as US economy shows signs of strain
WASHINGTON (AP) — President Donald Trump began imposing higher import taxes on dozens of countries Thursday just as the economic fallout of his monthslong tariff threats has begun to cause visible damage to the U.S. economy. Just after midnight, goods from more than 60 countries and the European Union became subject to tariff rates of 10% or higher. Products from the EU, Japan and South Korea are taxed at 15%, while imports from Taiwan, Vietnam and Bangladesh are taxed at 20%. Trump also expects the EU, Japan and South Korea to invest hundreds of billions of dollars in the United States. 'I think the growth is going to be unprecedented,' Trump said Wednesday. He said the U.S. was 'taking in hundreds of billions of dollars in tariffs,' but did not provide a specific figure for revenues because 'we don't even know what the final number is' regarding the rates. Despite the uncertainty, the White House is confident that the onset of his tariffs will provide clarity about the path for the world's largest economy. Now that companies understand the direction the U.S. is headed, the Republican administration believes it can ramp up new investments and jump-start hiring in ways that can rebalance America as a manufacturing power. So far, however, there are signs of self-inflicted wounds to the U.S. as companies and consumers brace for the impact of the new taxes. Risk of economic erosion Hiring began to stall, inflationary pressures crept upward and home values in key markets started to decline after the initial tariff rollout in April, said John Silvia, CEO of Dynamic Economic Strategy. 'A less productive economy requires fewer workers,' Silvia said. 'But there is more, the higher tariff prices lower workers' real wages. The economy has become less productive, and firms cannot pay the same real wages as before. Actions have consequences.' Many economists say the risk is that the American economy is steadily eroded. 'It's going to be fine sand in the gears and slow things down," said Brad Jensen, a professor at Georgetown University. Trump has promoted the tariffs as a way to reduce America's persistent trade deficit. But importers tried to avoid the taxes by bringing in more goods before the tariffs took effect. As a result, the $582.7 billion trade imbalance for the first half of the year was 38% higher than in 2024. Total construction spending has dropped 2.9% over the past year. The economic pain is not confined to the U.S. Germany, which sends 10% of its exports to the U.S. market, saw industrial production sag 1.9% in June as Trump's earlier rounds of tariffs took hold. 'The new tariffs will clearly weigh on economic growth,' said Carsten Brzeski, global chief of macro for ING bank. Dismay in India and Switzerland The lead-up to Thursday fit the slapdash nature of Trump's tariffs, which have been rolled out, walked back, delayed, increased, imposed by letter and renegotiated. Trump on Wednesday announced additional 25% tariffs to be imposed on India because of its purchases of Russian oil, bringing its total import taxes to 50%. A leading group of Indian exporters said that will affect nearly 55% of the country's outbound shipments to America and force exporters to lose long-standing clients. 'Absorbing this sudden cost escalation is simply not viable. Margins are already thin,' S.C. Ralhan, president of the Federation of Indian Export Organizations, said in a statement. The Swiss executive branch, the Federal Council, was expected to meet Thursday after President Karin Keller-Sutter and other Swiss officials returned from a hastily arranged trip to Washington in a failed bid to avert a 39% U.S. tariffs on Swiss goods. Import taxes are still coming on pharmaceutical drugs, and Trump announced 100% tariffs on computer chips. That could leave the U.S. economy in a place of suspended animation as it awaits the impact. Stock market remains solid The president's use of a 1977 law to declare an economic emergency to impose the tariffs is under a legal challenge. Even people who worked with Trump during his first term are skeptical, such as Paul Ryan, the Wisconsin Republican who was House speaker. 'There's no sort of rationale for this other than the president wanting to raise tariffs based upon his whims, his opinions,' Ryan told CNBC on Wednesday. Trump is aware of the risk that courts could overturn his tariffs. In a Truth Social tweet, he said, "THE ONLY THING THAT CAN STOP AMERICA'S GREATNESS WOULD BE A RADICAL LEFT COURT THAT WANTS TO SEE OUR COUNTRY FAIL!" The stock market has been solid during the tariff drama, with the S&P 500 index climbing more than 25% from its April low. The market's rebound and the income tax cuts in Trump's tax and spending measure signed into law on July 4 have given the White House confidence that economic growth is bound to accelerate in the coming months. On the global financial markets, indexes rose across much of Europe and Asia, while stocks were slipping on Wall Street. But ING's Brzeski warned: 'While financial markets seem to have grown numb to tariff announcements, let's not forget that their adverse effects on economies will gradually unfold over time.' Trump foresees an economic boom. American voters and the rest of the world wait, nervously. 'There's one person who can afford to be cavalier about the uncertainty that he's creating, and that's Donald Trump,' said Rachel West, a senior fellow at The Century Foundation who worked in the Biden White House on labor policy. 'The rest of Americans are already paying the price for that uncertainty.'
Globe and Mail
2 hours ago
- Globe and Mail
HCI Group (HCI) Q2 EPS Jumps 22%
HCI Group (NYSE:HCI), a property and casualty insurance company with a heavy focus on the Florida market, reported earnings for the second quarter of 2025 on August 7, 2025. In the latest Q2 2025 results, HCI Group beat expectations on both headline earnings (GAAP EPS of $5.18 vs. estimate of $4.52) and revenue (GAAP revenue of $302.6 million vs. estimate of $218.98 million). EPS (GAAP) reached $5.18, compared to the analyst estimate of $4.52. Gross premiums earned (GAAP) were $302.6 million, up from $263.6 million in Q2 2024. These results highlight substantial improvement in underwriting profitability and operational performance. The company also reaffirmed the pending separation of its technology affiliate Exio and maintained its quarterly dividend. Overall, the period reflects strong growth, margin expansion, and continued strategic progress. Source: Analyst estimates for the quarter provided by FactSet. About the Business and Recent Focus Areas HCI Group operates as a diversified insurance and technology business, with most revenue coming from property insurance policies in Florida and other states. Its portfolio spans homeowners, condominium, and specialty insurance, plus a growing footprint in technology and select real estate investments. The company has a strong focus on underwriting discipline and the use of its proprietary claims processing and risk assessment technology. Recently, the company has prioritized growing its technology division (Exio), strengthening risk management, and expanding its core insurance segments. Key success factors include effective catastrophe risk management, regulatory compliance, and leveraging technology for underwriting and operational efficiencies. Strategic expansion has included launching new products and entering fresh geographic markets. Quarter Review: Financial and Operational Performance Pre-tax income (GAAP) increased to $94.4 million, up from $76.0 million in Q2 2024, while net income after noncontrolling interests rose to $66.2 million from $54.1 million in Q2 2024. Book value per share reached $58.55 at June 30, 2025, up from $42.72 at June 30, 2024. This growth in equity reflects both earnings retention and the benefit of lower-than-average catastrophe claims experience. Core insurance operations showed premium growth and improved profitability. Total gross written premiums reached $356.5 million, up from $306.9 million in Q2 2024. Major contributors included Homeowners Choice at $227.1 million (from $191.8 million) in gross written premiums. and TypTap Insurance, HCI's technology-driven homeowners insurance product, which grew to $110.4 million (from $79.1 million) in gross written premiums. Tailrow Reciprocal Exchange, a new home insurance entity launched in February 2025, contributed $5.2 million in gross written premiums as it began its rollout. The gross loss ratio improved to 21.3%, down from 29.7% in Q2 2024. The gross loss ratio measures insurance losses and claims expenses as a percentage of premiums earned; a lower figure suggests higher underwriting profitability. Management credited the improvement to lower claims and litigation frequency. However, they cautioned that gross loss ratios could move back up to the 24–25% range if claim volumes normalize. Across segments, TypTap and Tailrow helped drive premium and revenue growth. Premiums ceded to reinsurance rose, reflecting both higher overall premium volume and continued risk mitigation for hurricane exposures. Policy acquisition and underwriting expenses increased in line with growth, reaching $30.6 million (from $23.5 million), while general and administrative expenses (GAAP) were $20.0 million (from $17.5 million in Q2 2024). There was no adverse development in insurance reserves, and ongoing compliance reviews by regulators, including a financial examination by the Florida Department of Financial Services, were noted. The quarter also saw a substantial reduction in long-term debt as the company converted its 4.75% convertible notes, strengthening the balance sheet by reducing leverage and improving capital flexibility. A major strategic initiative in the quarter was progress on the planned separation of Exio, the technology division. Exio is a software platform used to enhance efficiency in HCI's underwriting functions, and it operates a transaction-based revenue model. Exio's reported stand-alone revenue in Q1 2025 was $52 million, with $24 million in pre-tax income. The spin-off, which is targeted for completion by year end, is expected to unlock new opportunities for Exio to partner with third-party insurance carriers outside the HCI umbrella. The quarterly dividend was maintained at $0.40 per share, unchanged from the same period last year. Looking Ahead Management did not provide detailed numerical guidance for the remainder of fiscal 2025. Leadership commented that the company expects to continue making progress on its key initiatives, especially the Exio spin-off, which is on track for late in the year and seen as a way to support further capital growth and technological expansion. In the near term, investors should watch for developments related to the Exio spin-off and further expansion of TypTap and Tailrow. Catastrophe loss experience and reinsurance costs will also affect results, particularly as hurricane season progresses. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,046%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of August 4, 2025
Globe and Mail
2 hours ago
- Globe and Mail
Rani (RANI) Q2 Net Loss Improves 16%
Key Points No revenue was reported, in line with expectations. Cash, cash equivalents, and marketable securities declined from $27.6 million as of December 31, 2024, to $10.2 million as of June 30, 2025. These 10 stocks could mint the next wave of millionaires › Rani Therapeutics (NASDAQ:RANI), a biotech company developing oral biologic drug delivery technology, released its earnings for the second quarter of fiscal 2025 on August 7, 2025. Marking an improvement from the prior year period's $(0.26) GAAP result. The company reported no revenue, matching expectations. An overall assessment of the quarter shows progress in pipeline and partnerships, but persistent financial strain and no commercial revenue remain key themes for the period. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (GAAP) $(0.18) $(0.28) $(0.26) -30.8 % Revenue (GAAP) $0 $0 $0 N/A Research & Development Expense $5.5 million $6.1 million (9.8 %) General & Administrative Expense $5.0 million $6.4 million (21.9 %) Net Loss (GAAP) $(11.2 million) $(13.4 million) -16.4 % Source: Analyst estimates for the quarter provided by FactSet. Company Overview and Recent Focus Rani Therapeutics is focused on enabling the oral delivery of biologic drugs, which are medications typically given by injection due to their complexity and sensitivity. Its main technology, the RaniPill capsule, aims to deliver these drugs through the digestive system, aiming for similar efficacy as injection-based treatments. Recently, the company has concentrated on advancing clinical candidates using its RaniPill system, securing strategic research partnerships, and actively managing costs amid ongoing financial challenges. Success for Rani depends on demonstrating safety and efficacy in clinical trials, creating alliances with established drug makers, and managing cash through incremental fundraising while awaiting regulatory milestones. Quarter Highlights: Financials, Pipeline, and Operations The quarter showed no revenue, as all product candidates remain in pre-launch development stages. Net loss (GAAP) improved year over year, narrowing to $(11.2) million from $(13.4) million. The primary driver was reduced spending: Research and development expenses fell to $5.5 million, down $0.6 million, due to lower compensation costs. General and administrative costs (GAAP) dropped to $5.0 million, reflecting reduced third-party services and lower compensation. Cash, cash equivalents, and marketable securities totaled $10.2 million as of June 30, 2025, a significant reduction from $27.6 million as of December 31, 2024. The company raised $4.3 million in May 2025 through a warrant inducement and another $3.0 million in July 2025 through an equity offering. However, Current liabilities of $20.6 million continue to exceed current assets of $11.1 million, resulting in a stockholders' deficit of $(9.2) million. On the research and development front, Rani announced a new preclinical collaboration with Chugai to test two undisclosed biologic molecules using the RaniPill system, with the agreement entered in August 2024. Separately, at ENDO 2025, the company presented data showing that its RT-114 candidate -- an oral, dual GLP-1/GLP-2 (glucagon-like peptide 1 and 2) receptor agonist -- achieved similar results to injectable forms in canine models. GLP-1 and GLP-2 therapeutics are being researched for obesity treatment, a large and competitive market. In terms of pipeline progress, Rani is planning to initiate a Phase 1 clinical trial for RT-114 in the second half of 2025, marking an important milestone for its oral delivery ambitions. These product advances aim to validate the RaniPill technology in humans and add value through drug pipeline expansion. Looking Ahead: Management Outlook and Investor Focus Management reiterated plans to begin Phase 1 clinical studies for RT-114 for obesity in the second half of 2025. No guidance was given for anticipated revenue or profitability beyond this clinical milestone, and no formal financial outlook was offered. RANI does not currently pay a dividend. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,046%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. *Stock Advisor returns as of August 4, 2025
