CoreWeave and Nebius Group are highlighted as key beneficiaries in the rapidly expanding GPU-as-a-service (GPUaaS) sector, driven by intense demand for AI compute infrastructure. CoreWeave, specializing in AI workloads and backed by a 7% Nvidia stake, demonstrated over 400% Q1 revenue growth, while Nebius, an AI-focused entity, reported over 600% quarterly revenue growth and raised its annual guidance to $900M-$1.1B. While Wall Street projects higher short-term returns for Nebius, both firms are positioned for substantial long-term growth, appealing to aggressive investors seeking exposure to the high-risk, high-reward AI infrastructure market.
Investors have piled into artificial intelligence (AI) stocks in recent years, buying shares of companies involved in various areas of the technology -- from chip designers to players in fields like voice AI. The industry offers investors a wide range of choices, and many of these have already delivered significant gains. For example, chip designer Nvidia and voice AI player SoundHound AI have advanced 1,300% and nearly 400%, respectively, over three years. One area of AI that's emerged as a winning one is cloud infrastructure, most specifically the GPU-as-a-service (GPUaaS) space. Graphics processing units (GPUs) are the key chips driving crucial processes like the training and inferencing of models, so they are in great demand. GPUaaS companies allow customers to rent this compute as needed rather than going out and buying their own chips. Two companies that have emerged as current and potentially future winners are CoreWeave (CRWV 8.65%) and Nebius Group (NBIS 3.65%). Their stock prices have soared more than 200% and 300%, respectively, so far this year. Wall Street is optimistic about the future of these players, but expects double-digit gains from only one in the coming 12 months. The CoreWeave story CoreWeave's cloud offerings differ from those of major cloud providers because it specializes in AI workloads. Customers don't turn to CoreWeave for general cloud services but instead for top Nvidia GPUs to run their AI projects. Since CoreWeave focuses on this, it's able to optimize its offering to favor efficiency for its customers. Another plus is that CoreWeave has a particularly close relationship with Nvidia. Nvidia owns 7% of CoreWeave stock, signaling the chip giant's confidence in this business. And CoreWeave has been the first to launch Nvidia's latest platforms, such as the Blackwell architecture. This is important because every day counts for customers aiming to run their workloads -- the sooner they can get their projects going, the sooner those projects can bring in revenue. NASDAQ: CRWV Key Data Points All of this has translated into explosive revenue growth for CoreWeave, with revenue advancing more than 400% year over year in the first quarter and revenue tripling year over year in the second quarter. The Nebius story Nebius, like CoreWeave, rents out compute to customers as well as access to managed services that they can use across their AI platforms. The company emerged last year after a reorganization of Russian technology company Yandex. Yandex businesses operating outside of Russia were kept and renamed Nebius, and the company's focus shifted to AI. Nvidia also has a stake in this up-and-coming cloud company, holding 1,190,476 shares, representing about 1.5% of Nvidia's investment portfolio, while CoreWeave accounts for 91% of Nvidia's holdings. Still, any investment from the chip giant is positive as Nvidia has what it takes to clearly assess the AI story ahead and may be well positioned to select winners. NASDAQ: NBIS Key Data Points Like CoreWeave, Nebius has seen demand surge. In the company's latest earnings report, it said quarterly revenue climbed more than 600% to $105 million. And it increased its annual run rate revenue guidance to the range of $900 million to $1.1 billion -- up from an earlier forecast of $750 million to $1 billion. What Wall Street predicts Both of these stocks have roared higher recently. And now, a look at Wall Street's price forecasts shows the average prediction is for CoreWeave to advance 6% over the next 12 months and Nebius to climb 23%. These are just the average predictions. The most optimistic analyst forecasts a 75% gain for CoreWeave and a 66% increase for Nebius. Considering this, which stock should investors favor? Is one better than the other? Not necessarily. Wall Street estimates aren't an exact science, so it's possible CoreWeave and Nebius may not perform as predicted over the coming months. And 12 months is a pretty short term, so this period is unlikely to define a stock's full potential. It's better to take a long-term view, and here, we can see that both players could deliver revenue and stock performance thanks to demand for GPUaaS. Of course, there are risks involved in this newish market, so these stocks are better left to aggressive investors. But if you fall into this category, CoreWeave and Nebius both could make excellent additions to your long-term AI portfolio. AI-driven demand for Graphics Processing Unit as a Service (GPUaaS) infrastructure is propelling significant growth, with CoreWeave (CRWV) and Nebius Group (NBIS) emerging as key beneficiaries. Both companies have seen their stock prices surge over 200% and 300% year-to-date, reflecting strong market enthusiasm for this critical AI compute segment. CoreWeave specializes in AI workloads, leveraging a strategic partnership with Nvidia, which holds a 7% equity stake and represents 91% of Nvidia's direct AI investments. This collaboration aids early platform adoption, translating into explosive financial results with Q1 revenue growth exceeding 400% and Q2 revenue tripling year-over-year. Nebius, an AI-focused entity, also demonstrates robust momentum, reporting over 600% quarterly revenue growth to $105 million and significantly raising its annual run rate guidance to $900 million-$1.1 billion. Nvidia maintains a notable, albeit smaller, investment in Nebius, holding 1.5% of its portfolio. While Wall Street forecasts average 12-month gains of 6% for CoreWeave and 23% for Nebius, the article emphasizes the long-term potential in the high-demand GPUaaS market. This nascent sector carries inherent risks, making these investments most suitable for aggressive investors seeking foundational AI infrastructure exposure.
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