University of Kwazulu-Natal

Nvidia Vs Coreweave Why Nvidia Leads In Ai Stocks

Bonisiwe Shabane
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nvidia vs coreweave why nvidia leads in ai stocks

Investors looking for high-growth opportunities have turned to the artificial intelligence (AI) sector in recent years. This is as companies operating in the space have delivered impressive revenue growth -- in the double and triple digits -- and forecast strong long-term prospects. Why is the picture so bright? AI promises to offer users significant advantages, such as efficiency, performance, and lower costs -- and this has prompted companies to jump on board. Those that are crucial to the AI infrastructure buildout, such as providers of computing power, have been the first to benefit in this AI boom. And two great examples are Nvidia (NVDA +0.47%) and CoreWeave (CRWV +2.36%).

The former is the world's No. 1 AI chip designer, and the latter is a company that rents out access to computing power. Nvidia has seen its shares advance nearly 800% over three years, and CoreWeave's stock has surged 268% from its March initial public offering (IPO). Both of these players represent compelling AI investments. But which is the better high-growth AI buy right now? Let's find out.

Nvidia makes the most sought-after graphics processing units (GPUs), or chips, to power key AI tasks like the processes of training a model and powering its "thinking" so that it can solve problems. Tech giants such as Meta Platforms and Alphabet as well as other companies aiming to win in AI have flocked to Nvidia -- they recognize the importance of using the very best tools out... And interest has been so strong that as Nvidia launched its Blackwell architecture and chip late last year, demand surpassed supply. Still, Nvidia managed to roll out the platform without major glitches, and Blackwell delivered $11 billion in its very first quarter on the market. All of this demonstrates the power of Nvidia's market position. Written by Tirthankar Chakraborty for Zacks->

Amid the rapidly growing artificial intelligence (AI) market, NVIDIA Corporation NVDA saw a significant rise in sales of data center graphics processing units (GPUs), resulting in an astonishing 33,300% increase over the past decade... Meanwhile, another AI-focused company, CoreWeave, Inc. CRWV, with a smaller market cap of $47 billion, is also experiencing growth, prompting investors to wonder if it can achieve similar success. Let’s examine which company currently has more growth potential, especially after both companies released positive earnings reports for the second quarter. NVIDIA recently reported positive growth in both top and bottom lines for the fiscal second quarter. In the quarter, NVIDIA’s revenues increased by 56% from $30.04 billion a year ago.

The generative AI boom has helped NVIDIA post year-over-year revenue growth of more than 50% for nine successive quarters. During the fiscal second quarter, CEO Jensen Huang was expected to receive authorization from the U.S. government to sell its H20 chips to China. However, NVIDIA didn’t sell any such chips to China; instead, they gained $180 million by selling H2O inventory to a customer located outside of China. There will prove to be many winners as artificial intelligence (AI) infrastructure continues to grow and AI end-uses expand. Nvidia (NVDA) has been the Wall Street darling surrounding everything AI for the past two years.

CoreWeave (CRWV) has been getting the love most recently, though. Shares of the AI hyperscaler providing cloud services have soared about 185% in just the past month as of this writing. Nvidia stock has increased 24% in that time. CoreWeave just went public in late March, and the shares have jumped about 270% since that initial public offering (IPO). Investors may wonder if Nvidia's shine is fading, and it's time to buy CoreWeave instead. I'd argue that is flawed thinking, however.

The growth isn't over for Nvidia. Investors may be taking a breather after the early exponential gains in Nvidia stock. Growth in the business itself has also slowed, though that was inevitable. Sales of its advanced chips in the data center segment had been growing like a weed. Revenue in that segment has been increasing in each consecutive quarter for the last two years. In the most recent fiscal quarter, that growth rate slowed to 10%, though, as seen below.

Despite that trend, it's clear AI demand hasn't yet peaked. Remember, these are still sequential quarterly increases in data center sales. For perspective, that fiscal first-quarter revenue was a 73% jump compared to the prior year period. Management also guided investors to expect further revenue growth in the current quarter. So, while an unsustainable growth rate slows, the company is still solidly in growth mode. Nvidia is more ubiquitous than you might think.

That's because it's not just Nvidia's advanced GPU and CPU chips driving sales and expanding AI infrastructure. Its AI ecosystem includes interconnect technologies, the CUDA (compute unified device architecture) software platform, and artificial intelligence processors that are part of many different types of architectures. CEO Jensen Huang recently touted Nintendo's new Switch 2 gaming console, for example. The unit includes Nvidia's AI processors that Huang claims Q: What is the main difference between Nvidia and CoreWeave in the AI market? A: Nvidia is a leading manufacturer of AI chips and software platforms, while CoreWeave is a cloud service provider that leases data center space to companies needing scalable compute power.

In the fast-evolving world of artificial intelligence (AI), new players are emerging as vital contributors to the infrastructure that supports this technological revolution. Generally viewed as the Wall Street darling of AI, Nvidia has dominated headlines with its AI chips and products. However, CoreWeave, an emerging contender in the cloud services sphere, is not just making waves; it’s creating a tsunami. Recently traded on the NASDAQ under the ticker CRWV, CoreWeave’s stock value has skyrocketed by a staggering 185% in just one month. In stark contrast, Nvidia’s shares have risen only 24% during the same period. Remarkably, since its initial public offering (IPO) in March, CoreWeave’s stock has surged by approximately 270%, igniting investor excitement and speculation about its potential to outpace Nvidia.

While Nvidia remains a leader in the market, there are signs that its growth trajectory may be moderating. After experiencing phenomenal growth over the past two years, the company’s revenue from its data center segment has slowed to a growth rate of 10%. This shift indicates that investors might need to recalibrate their expectations regarding future performance. Despite these fluctuations, demand for AI isn’t waning. The recent fiscal first-quarter revenue revealed a remarkable 73% increase compared to the previous year. The market seems to be adjusting rather than retracting, and many insiders project ongoing revenue growth for the current quarter.

As data centers proliferate, Nvidia remains well-positioned to leverage its existing relationships and infrastructure. Nvidia’s competitive edge lies not only in its advanced GPU and CPU chips but also in the robust AI ecosystem it has created. From interconnect technologies to the pivotal CUDA software platform, Nvidia is reshaping the landscape of AI. For instance, CEO Jensen Huang highlighted the impact of Nvidia’s innovative processors in Nintendo’s upcoming Switch 2 gaming console, emphasizing how its chips enhance gaming experiences in real time. Amid the rapidly growing artificial intelligence (AI) market, NVIDIA Corporation NVDA saw a significant rise in sales of data center graphics processing units (GPUs), resulting in an astonishing 33,300% increase over the past decade... Meanwhile, another AI-focused company, CoreWeave, Inc.

CRWV, with a smaller market cap of $47 billion, is also experiencing growth, prompting investors to wonder if it can achieve similar success. Let’s examine which company currently has more growth potential, especially after both companies released positive earnings reports for the second quarter. NVIDIA recently reported positive growth in both top and bottom lines for the fiscal second quarter. In the quarter, NVIDIA’s revenues increased by 56% from $30.04 billion a year ago. The generative AI boom has helped NVIDIA post year-over-year revenue growth of more than 50% for nine successive quarters. During the fiscal second quarter, CEO Jensen Huang was expected to receive authorization from the U.S.

government to sell its H20 chips to China. However, NVIDIA didn’t sell any such chips to China; instead, they gained $180 million by selling H2O inventory to a customer located outside of China. NVIDIA’s growth is fueled by its data center operations, which focus on GPUs. This division saw revenues jump 56% year over year to $41.1 billion. Major cloud providers have increased their purchase of Blackwell chips, whose sales climbed 17% from the first quarter. The sales of NVIDIA’s new product lines now represent 70% of the company’s data center revenues.

These two stocks have benefited significantly from a surge in demand due to artificial intelligence. When you think of top artificial intelligence (AI) stocks to own, Nvidia (NVDA +2.95%) inevitably is one of the first ones that probably comes to mind. In recent years, it generated mammoth, life-changing returns for investors. But it's also the most valuable company in the world today, with a valuation of nearly $4.3 trillion. Investors may be looking for similar stocks, but perhaps smaller ones, that may possess more upside. CoreWeave (CRWV +6.67%) is one option that may fit the bill.

It rents out AI computing power, giving customers access to Nvidia's latest chips. It should benefit from Nvidia's continued growth and the growing demands of companies developing AI-powered products and services. And it's a much smaller company, at just a fraction of Nvidia's valuation. It's up big this year and coming off a stellar quarter. Which of these AI stocks makes for the better buy right now? With Nvidia, you're investing in a high-powered business that continues to dominate the AI chip market, being the go-to option for many tech companies.

In the trailing 12 months, the company has reported $148.5 billion in revenue, with profits totaling just under $77 billion. Those are incredibly impressive profit margins, which highlight just how much dominance the company has and the pricing power it possesses. And that's with export restrictions limiting its sales to China. When it comes to investing in stock artificial intelligence (AI) in 2025, these two are rather appealing, yet distinct opportunities: Nvidia and CoreWeave. These two ride on the wave of the AI boom but still find different positions in the AI ecosystem. The following article presents a breakdown of the current financials, business strategies, growth opportunities, and threats of both companies to help you determine which of the AI stocks may be a better fit.

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