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Yahoo
25-07-2025
- Business
- Yahoo
CoreWeave vs. Amazon: Which AI Infra Stock Has More Upside Right Now?
Both CoreWeave CRWV and Amazon AMZN, through the Amazon Web Services platform, provide cloud infrastructure tailored for AI workloads. CoreWeave provides specialized GPU-accelerated infrastructure for AI through its 33 data centers, supported by 420 megawatts of active power, spread across the United States and Europe. It recently announced a $6 billion investment to set up a new data center in Lancaster, PA, with an initial capacity of 100 megawatts (MW) and a potential to scale up to 300MW. On the other hand, Amazon's AWS is a structurally dominant force in the cloud space (and is also making aggressive inroads in the AI infra space) and commands a leading share of the cloud market, followed by Microsoft and Google Cloud. Increased spending on AI infrastructure benefits both Amazon and CoreWeave, but not equally. So, if an investor wants to make a smart buy in the AI infrastructure space, which stock stands out? Let's break down how each company is performing and which one looks like the better investment right now. CoreWeave: A Fast-Growing Pure-Play AI Infra Provider CoreWeave is well-positioned to gain from the AI infrastructure boom. 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. Strategic partnerships with major players like OpenAI and NVIDIA bode well, along with a massive $259 billion revenue backlog. Apart from a $11.9 billion deal with OpenAI, CRWV has added 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 second quarter. 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. The stock has declined sharply post its announcement of $9 billion takeover of Core Scientific. Since the announcement on July 7, CRWV has lost nearly 25%. Apart from scrutiny surrounding the company's latest acquisition bid, it also faces other headwinds. CRWV's aggressive capital deployment strategy is a key concern. CRWV expects capex to be between $20 billion and $23 billion for 2025 due to accelerated investment in the platform to meet customer demand. High capex, even with a success-based model, exposes CoreWeave to execution risks if contract revenue does not materialize on time. CoreWeave's aggressive data center buildout is being funded in part by debt, leading to ballooning interest expenses, which can exert pressure on the adjusted net income and potentially affect free cash flow generation. Stiff competition from the likes of AWS and Azure, and intense customer concentration risk remain concerning. CoreWeave's 77% of total revenues in 2024 came from the top two customers. Amazon: Aggressive Expansion AWS is the market leader in the cloud compute space and is now aggressively moving into AI infrastructure. To stay ahead of rivals, Amazon has launched custom AI chips (Trainium and Inferentia) and strengthened partnerships with the likes of NVIDIA while forging new collaborations with other AI developers to train and deploy models on AWS. AWS revenues surged 17% year over year in the first quarter of 2025, with an annualized revenue run rate pegged at $117 billion. AWS backlog reached $189 billion with a 4.1-year weighted average life, offering forward revenue visibility. In the last reported quarter, AWS signed new agreements with major companies, including Ericsson, Adobe, Uber Technologies, Nasdaq, Fujitsu and many others. Amazon highlighted that more than 85% of global IT spending is still on-premises, suggesting immense growth potential for AWS. Its increasing investments in generative AI are likely to continue aiding it in gaining momentum among cloud customers in the near term. More importantly, Amazon's AI business segment now operates at a multi-billion-dollar annual revenue run rate with triple-digit percentage growth year over year. Amazon's strategy focuses on custom silicon development, particularly its Trainium 2 chips, which offer 30-40% better price performance compared to GPU-based instances. The company has also expanded its AI model offerings through Amazon Bedrock and introduced services like Amazon Nova foundation models. AMZN has added the latest foundation models in Amazon Bedrock, including Anthropic's Claude 3.7 Sonnet, Meta's Llama 4 family of models, DeepSeek's R1 and Mistral AI's Pixtral Large. AMZN is ramping up investment to build its technology infrastructure, primarily related to AWS and for custom silicon like Trainium. Moreover, its diversified businesses and stupendous financial resources give it an edge. As of March 31, 2025, cash and cash equivalents were $66.2 billion, while operating cash flow generated in the first quarter stood at nearly $17 billion. However, capacity constraints pose a challenge. Amazon has indicated that AI demand currently outstrips available capacity, suggesting the company could drive higher revenues with additional infrastructure. The intense competition from Microsoft's Azure and Google Cloud is concerning. Heavy capex spend could strain margins if AI returns do not materialize. CRWV Shares vs. AMZN Over the past month, AMZN shares have gained 6.9% while CRWV stock has lost 24.1%. Image Source: Zacks Investment Research Valuation for CRWV & AMZN Valuation-wise, both Amazon and CoreWeave are overvalued, as suggested by the Value Score of D and F, respectively. Image Source: Zacks Investment Research In terms of Price/Book, CRWV shares are trading at 30.22X, lower than AMZN's 8.06X. How Do Zacks Estimates Compare for CRWV & AMZN? Analysts have kept their earnings estimates unchanged for CRWV's bottom line for the current year. Image Source: Zacks Investment Research For AMZN, there is a marginal upward revision. Image Source: Zacks Investment Research CRWV or AMZN: Which is a Better Pick? Amazon remains a more stable and diversified AI cloud/infra bet, with AWS as a high growth engine. AWS is well poised to benefit from AI demand at a massive scale, as it aggressively improves on specialization. CRWV gains from niche specialization in AI infrastructure and strategic alignment with major AI players, but is capital-intensive. AMZN currently sports a Zacks Rank #1 (Strong Buy) while CRWV has a Zacks Rank #4 (Sell). If investors are seeking an AI infrastructure stock with long-term growth potential, Amazon is a better pick in terms of Zacks Rank. You can see the complete list of today's Zacks #1 Rank 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 Inc. (AMZN) : 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
14-06-2025
- Business
- Yahoo
CoreWeave Guides $4.9-$5.1B in 2025 Revenues: What's Fueling This?
CoreWeave, Inc. CRWV has guided 2025 revenues to be in the range of $4.9-$5.1 billion, fueled by surging AI-infrastructure demand. CRWV 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. Strategic deal wins like the OpenAI contract (which has a value up to $11.9 billion) and a $4 billion expansion with a major AI-enterprise client are driving forward revenue visibility. The company also 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. CoreWeave now boasts a growing 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 has added 1,400 AI labs and enterprises as clients for CoreWeave. Apart from scaling capacity and getting adequate financing for infrastructure, CRWV is also expanding its go-to-market capabilities. With a success-based capex model and expanding global reach, CoreWeave appears well-positioned to capture a significant share of the AI-infrastructure market. On 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. This uptrend in spending will benefit other players in this space, including smaller players like Nebius Group N.V. NBIS and tech behemoths like Microsoft Corporation MSFT. Driven by accelerating demand for its AI-infrastructure services, Nebius remains confident in achieving the full-year annualized run-rate revenue ('ARR') guidance of $750 million to $1 billion. For 2025, the company also reaffirmed its overall revenue guidance of $500 million to $700 million. In the first quarter of 2025, ARR saw a 700% jump, highlighting a structurally expanding revenue base. ARR for April was $310, which provides a strong start for the second quarter. To gain a larger share of the AI-cloud compute market, NBIS is focusing on technical enhancements that increase reliability and reduce downtime to boost customer retention. 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. The rising adoption of enterprise capabilities of Azure OpenAI and Copilots across Microsoft 365, Dynamics 365 and Power Platform bodes well. With Azure AI, Microsoft is establishing itself as the application server for the AI era, offering access to a broad range of models tailored to customers' specific needs around cost, latency and design. The number of Azure AI customers and average spending continue to grow. Shares of CoreWeave have gained 120.8% year to date compared with the Internet Software industry's growth of 4.1%. Image Source: Zacks Investment Research CRWV currently carries a Zacks Rank #3 (Hold). 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 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
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
15-05-2025
- Business
- Yahoo
CoreWeave Q1 Revenues Beat Estimates, Earnings Down Y/Y, Stock Tanks
CoreWeave, Inc. CRWV reported first-quarter 2025 loss per share of $1.49, which was much wider than a loss of 62 cents in the year-ago quarter. Loss per share includes $177 million of stock-based compensation expense for awards with a liquidity-event performance-based vesting condition, which was satisfied at IPO. Adjusted net loss for the quarter was $149.6 million compared with $23.6 million a year in the quarter were a record $981.6 million, which beat the Zacks Consensus Estimate by 15.2%. Total revenues jumped 420% year over year. The top-line performance was driven by increasing demand for AI-cloud infrastructure. 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. Apart from scaling capacity and getting adequate financing for infrastructure, CRWV is also expanding its go-to-market capabilities. Management inked a strategic partnership with OpenAI for about $11.9 billion while adding several new enterprise customers and a hyperscaler client. It has inked expansion agreements with many customers, including a $4 billion expansion with a big AI-enterprise customer. Moreover, the buyout of the Weights and Biases acquisition has added 1,400 AI labs and enterprises as clients for CoreWeave. Also, the company expanded its data-center footprint by adding a new data center in Spain in collaboration with Merlin Edged, with Mistral AI as the anchor client. Revenue backlog (inclusive of remaining performance obligation and other amounts the company estimates will be recognized as revenues in future periods under committed customer contracts) was $259 billion, rising 63% year over year. 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. Image Source: Zacks Investment Research However, management's commentary surrounding higher capital expenditures 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. The company anticipates stock-based compensation to remain slightly higher in 2025 for the grants issued pertaining to the IPO. Following the results, shares are down 6.6% in the pre-market trading session today. CRWV's shares have gained 65.7% in the past month, significantly outperforming the 28% rise of its Internet Software industry. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.) Total operating expenses were $1 billion compared with $171.8 million in the year-ago quarter. This was inclusive of a one-time stock-based compensation expense recognized upon completion of the IPO. Operating loss was $27.5 million against operating income of $16.9 million in the prior year quarter. Adjusted operating income was $162.6 million, up 550% year over year, while adjusted operating margin was 17%, up from 13% in the year-ago EBITDA was $606.1 million compared with $104.6 million in the prior-year quarter. As of March 31, 2025, CRWV had $2.5 billion in cash, cash equivalents and restricted cash. The company exited the first quarter with a cash flow of $61.2 million while capex was $19 billion. Driven by healthy momentum despite evolving trade policy, macro uncertainty and volatility, 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. Capex is forecasted to be between $3 billion and $3.5 billion, amid accelerated platform investments. CRWV currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here. BlackBerry BB reported the fourth quarter of fiscal 2025 non-GAAP earnings per share (EPS) of 3 cents. The figure was up from the company's estimate of a loss of 1 cent to EPS of 1 cent. In the year-ago quarter, it reported a non-GAAP EPS of 3 cents. The Zacks Consensus Estimate was pegged at 2 cents per share. BlackBerry's total revenues were $141.7 million compared with the prior-quarter revenues of $152.9 million. Although the top-line beat management's guidance ($126-$135 million), the year-over-year contraction resulted from soft sales across all segments. Shares of BB are up 21.2% in the past month. Arista Networks, Inc. ANET reported strong first-quarter 2025 results, with revenues and adjusted earnings increasing year over year, driven by robust demand trends across key verticals such as cloud, AI-focused data centers, and campus enterprises. On a non-GAAP basis, net income was a record high at $826.2 million or 65 cents per share compared with $637.7 million or 50 cents in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents. Revenues surged to $2 billion from $1.57 billion in the prior-year quarter, driven by strength in the enterprise vertical. The top line beat the consensus estimate of $1.96 billion.F5, Inc. FFIV reported second-quarter fiscal 2025 non-GAAP earnings of $3.42 per share, which beat the Zacks Consensus Estimate by 10.3% and management's guidance of $3.02-$3.14 (midpoint of $3.08). The bottom line increased 17.5% year over year. F5's revenues of $731 million for the second quarter of fiscal 2025 surpassed the consensus mark by 2%. The top line increased 7.3% on a year-over-year basis. Revenues also surpassed management's guidance of $705-$725 million (midpoint of $715 million). 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 F5, Inc. (FFIV) : Free Stock Analysis Report Arista Networks, Inc. (ANET) : Free Stock Analysis Report BlackBerry Limited (BB) : 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
