Cloud computing giants are spending large on buying AI information middle capability.
This market is predicted to generate $400 billion in income by 2028, and that is nice information for this Nebius peer.
This Nebius various can enhance its information middle capability at a sooner tempo, and it’s buying and selling at a considerably decrease valuation.
10 shares we like higher than CoreWeave ›
Nebius Holdings (NASDAQ: NBIS) inventory took off on Sept. 9, rising nearly 50% in a single day after it emerged that the cloud synthetic intelligence (AI) infrastructure supplier has landed an enormous contract with Microsoft (NASDAQ: MSFT) that is going to supercharge its development for years to come back.
For a corporation that has clocked $250 million in income previously 4 quarters, the $19.4 billion contract from Microsoft that can run till 2031 is unquestionably a giant deal. The tech large has given Nebius such a profitable deal to achieve entry to the latter’s New Jersey information middle. It is a devoted AI information middle powered by graphics processing models (GPUs), and Microsoft goes to make use of the identical for dealing with AI workloads.
Nonetheless, Nebius isn’t the one devoted AI cloud infrastructure firm on the market. There may be one other firm that is been in advantageous type on the inventory market this yr, is rising at a strong tempo, has a terrific backlog, and is cheaper than Nebius from a valuation perspective.
Let’s take a more in-depth have a look at that title and why it is going to be a good suggestion to purchase it straight away.
Picture supply: Getty Photos.
CoreWeave (NASDAQ: CRWV) inventory jumped greater than 7% within the wake of the Nebius-Microsoft deal. It’s simple to see why that was the case. Similar to Nebius, CoreWeave additionally rents out its devoted, GPU-powered information facilities to prospects trying to run AI and machine studying (ML) workloads.
The corporate factors out that its AI infrastructure is purpose-built for AI, permitting its prospects to scale back the time to market and enhance effectivity and pace considerably. Not surprisingly, CoreWeave has witnessed remarkably strong demand for its AI infrastructure choices, as is obvious from the speedy development within the firm’s income and backlog.
CoreWeave’s prime line jumped 207% within the second quarter of 2025 to $1.2 billion. However what’s extra spectacular is its backlog value $30.1 billion, which elevated by almost $14 billion from the year-ago quarter. CoreWeave’s income backlog has doubled within the first half of 2025, due to the sizable contracts it has gained from the likes of OpenAI and Google Cloud.
OpenAI has awarded CoreWeave contracts totaling $15.9 billion this yr. CoreWeave has gained enterprise from new hyperscale and enterprise prospects as properly. Wanting forward, it will not be stunning to see CoreWeave’s income backlog getting fatter. That is as a result of main cloud computing suppliers are witnessing large development of their contractual obligations, and that is why they’re tapping the likes of Nebius and CoreWeave to get their fingers on extra AI information middle capability.
Microsoft, as an example, noticed its contracted remaining efficiency obligations (RPO) leap by 35% yr over yr within the earlier quarter to a whopping $368 billion. The corporate credited this large backlog to the strong demand for its cloud providers. This makes it clear why the tech large determined to show to Nebius to unlock extra capability in order that it may well fulfill the heavy AI computing demand that it’s witnessing.
An vital factor value noting right here is that Microsoft is CoreWeave’s largest buyer, accounting for 62% of its prime line in 2024. Meta Platforms and IBM are a few of its different prospects, and CoreWeave has additionally introduced OpenAI on board this yr. Provided that the corporate sees its addressable market hitting $400 billion by 2028, buyers can count on it to maintain its wholesome development ranges in the long term, particularly contemplating its deal with bringing extra capability on-line.
CoreWeave operated 33 AI information facilities in North America and Europe on the finish of the earlier quarter with an energetic energy capability of 470 megawatts (MW). The corporate plans to finish the yr with 900 MW of energetic information middle capability. What’s extra, its contracted information middle capability of two.2 gigawatts (GW) signifies that it may well considerably ramp up its capability in the long term.
Contracted energy refers back to the information middle capability that CoreWeave can deliver on-line by deploying compute, networking, and storage gear, which is able to flip the contracted capability into energetic capability. What’s value noting right here is that CoreWeave’s energetic capability was properly above Nebius’ 220 MW on the finish of the earlier quarter. Moreover, its contracted capability is way increased than that of Nebius, which expects to have 1 GW of contracted capability by the top of subsequent yr.
So, CoreWeave is forward of Nebius so far as capability is anxious. Throw in a extra engaging valuation, and it is easy to see why CoreWeave has the potential to fly increased sooner or later.
Consensus estimates are projecting red-hot development in CoreWeave’s income.
CRWV Income Estimates for Present Fiscal Yr information by YCharts
Its excellent backlog and the scale of its complete addressable market can certainly enable it to greater than triple its prime line within the area of simply two years, as seen within the chart above. This makes CoreWeave a beautiful purchase since it’s buying and selling at lower than 14 instances gross sales, an enormous low cost to Nebius’ price-to-sales ratio of 91.
Even when CoreWeave trades at 5 instances gross sales (in keeping with the Nasdaq Composite index’s a number of) after three years and achieves $17 billion in income, its market cap might leap to $85 billion. That factors towards a 73% leap from present ranges, although stronger features can’t be dominated out.
Before you purchase inventory in CoreWeave, contemplate this:
The Motley Idiot Inventory Advisor analyst workforce simply recognized what they imagine are the 10 greatest shares for buyers to purchase now… and CoreWeave wasn’t considered one of them. The ten shares that made the lower might produce monster returns within the coming years.
Contemplate when Netflix made this record on December 17, 2004… when you invested $1,000 on the time of our advice, you’d have $649,037!* Or when Nvidia made this record on April 15, 2005… when you invested $1,000 on the time of our advice, you’d have $1,086,028!*
Now, it’s value noting Inventory Advisor’s complete common return is 1,056% — a market-crushing outperformance in comparison with 188% for the S&P 500. Don’t miss out on the newest prime 10 record, accessible whenever you be part of Inventory Advisor.
See the ten shares »
*Inventory Advisor returns as of September 8, 2025
Harsh Chauhan has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Worldwide Enterprise Machines, Meta Platforms, and Microsoft. The Motley Idiot recommends Nebius Group and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
Nebius Inventory Has Made a Massive Transfer. This Synthetic Intelligence (AI) Inventory Might Be Subsequent. was initially printed by The Motley Idiot