CoreWeave Stock Soars After Major AI Deals: Is It Too Risky?
CoreWeave (NASDAQ: CRWV) stock is experiencing significant growth, fueled by recent major deals with companies like Meta Platforms and OpenAI. The artificial intelligence (AI) cloud service provider is poised to receive substantial revenue guarantees, leading to a surge in investor interest. However, amidst the excitement, it's crucial to consider the risks associated with this high-growth company.
CoreWeave's Meteoric Rise
CoreWeave has had a successful September, announcing deals with Meta worth up to $14.2 billion through 2031, and a similar deal with OpenAI, alongside a revenue guarantee from Nvidia for up to $6.3 billion. Since its IPO in late March, CoreWeave stock has increased by nearly 250%, a testament to its rapid expansion in the AI cloud services sector.
An initial $10,000 investment in CoreWeave at the time of its IPO would have grown to $34,200 by September 30th, reflecting a substantial 242% gain.
A High-Risk, High-Reward Scenario
Despite the impressive growth figures, investors should exercise caution. CoreWeave's growth is largely financed by expensive debt. The company faces the challenge of rapidly expanding its capacity to meet the demands of its clients, but overexpansion or a potential slowdown in AI demand could create significant financial strain.
Is CoreWeave a Buy Right Now?
Before investing in CoreWeave, it's wise to consider alternative investment options. The Motley Fool Stock Advisor team has identified what they believe are the 10 best stocks for investors to buy now, and CoreWeave was not among them. These stocks could potentially deliver considerable returns in the coming years.
For instance, early recommendations from Stock Advisor on companies like Netflix and Nvidia yielded returns of 646,567% and 1,143,710% respectively, on a $1,000 investment. The average return for Stock Advisor is 1,072%, significantly outperforming the S&P 500's 191%.
Note: Stock Advisor returns as of September 29, 2025.
