Nvidia's Q1 Results Were Great, but This AI Stock Could Be a Bigger Winner

Nvidia reported strong Q1 earnings, with revenue up 69% to $44.1 billion and data center revenue jumping 73% to $39.1 billion, driven by AI demand; adjusted EPS beat estimates despite a $4.5 billion write-down related to Chinese export restrictions. The company projects Q2 revenue of $45 billion, though this is $8 billion lower due to export restrictions. CoreWeave, an AI cloud computing provider and Nvidia customer, also saw substantial revenue growth of 420%, leading to its stock outperforming Nvidia in after-hours trading, suggesting strong demand for AI infrastructure benefits both companies.

Analysis

Nvidia's first-quarter earnings affirmed its dominance in the AI sector, with overall revenue surging 69% year-over-year to $44.1 billion, surpassing estimates of $43.3 billion. The critical data center segment reported a 73% revenue increase to $39.1 billion. Despite a $4.5 billion write-down for H20 chips designed for the Chinese market, adjusted gross margin remained robust at 71.3%, and adjusted earnings per share of $0.81 beat consensus; without the charge, EPS would have been $0.96. Nvidia's Q2 revenue guidance of $45 billion, although $8 billion lower than potential due to chip export restrictions, was positively received, with the stock gaining 4.9% in after-hours trading. Concurrently, CoreWeave, an AI-focused cloud computing provider in which Nvidia is a key investor and customer, demonstrated explosive growth in its first public quarter post-IPO in late March 2025. CoreWeave's revenue jumped 420% to $981.6 million. While its net loss widened to $314.6 million from $129.2 million, driven by IPO-related costs and a significant increase in interest expense to $263.8 million, its adjusted operating income showed strong underlying profitability, increasing from $25 million to $162.6 million. CoreWeave's stock, with a $60 billion market cap, outperformed Nvidia in after-hours trading with a 5.6% gain, underscoring strong investor appetite for AI-leveraged plays, even those with higher volatility and a less established track record. Nvidia's continued strong performance and positive outlook for AI infrastructure demand directly benefit CoreWeave, which utilizes Nvidia chips and has seen its stock double since its IPO.

Key Decisions for Investors

• Investors should recognize Nvidia's sustained strong financial performance and leadership in AI, though its substantial $3.3 trillion market capitalization may temper the magnitude of future stock price appreciation despite positive guidance.
• CoreWeave offers a higher-growth, albeit more volatile, avenue for AI exposure, buoyed by Nvidia's ecosystem and significant revenue acceleration; however, its expanding net losses, despite positive adjusted operating income, warrant careful scrutiny of its path to sustainable net profitability and cash flow generation.
• Closely monitor ongoing AI-related capital expenditures by major technology firms and the evolving landscape of chip export restrictions, as these factors are pivotal for both Nvidia's continued growth trajectory and CoreWeave's ability to capitalize on the AI infrastructure build-out.