CoreWeave's stock soars. Why Nvidia's fresh bet on the company is so significant.

By Britney Nguyen

Nvidia and CoreWeave are deepening their relationship in a way that could give the cloud company an edge over rivals

CoreWeave CEO Michael Intrator (second from right) said the company's expanded partnership with Nvidia reflects strong demand.

Shares of CoreWeave were climbing on Monday after Nvidia raised its bet on the cloud provider.

The companies are expanding their partnership to more quickly build out artificial-intelligence data centers. Additionally, Nvidia (NVDA) is investing $2 billion in CoreWeave's (CRWV) common stock at $87.20 per share.

The cloud-infrastructure company aims to build more than 5 gigawatts' worth of AI data centers by the end of the decade. The data centers, which will be operated by CoreWeave, will run future generations of Nvidia's AI systems, including its upcoming Rubin AI-chip platform and Vera central processing units. The data centers will also use the chip maker's Bluefield storage systems.

Evercore ISI analyst Amit Daryanani said that while the announcement will add to concerns about circular financing in the AI ecosystem, he is taking a more positive view and sees the potential for CoreWeave's balance sheet to improve as a result of this development.

And by getting in early on Nvidia's Rubin offerings, CoreWeave could get an edge on neocloud competitors, Daryanani suggested.

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CoreWeave CEO Michael Intrator said in a statement that the arrangement "underscores the strength of demand we are seeing across our customer base and the broader market signals as AI systems move into large-scale production."

Nvidia was already a major CoreWeave investor, owning about 6.6% of the company's shares outstanding as of the end of September, according to FactSet data.

CoreWeave's stock rose 5.7% on Monday, while Nvidia's stock slipped less than 1%.

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Monday's announcement builds on the relationship between the two companies, which includes an agreement requiring Nvidia to purchase capacity that isn't fully utilized by CoreWeave's customers through April 2032. In September, CoreWeave and Nvidia signed a new cloud-services agreement for $6.3 billion.

"The investment is confidence in their growth and confidence in CoreWeave's management and confidence in their business model," Nvidia CEO Jensen Huang told Bloomberg on Monday. He added that the companies are focused on making compute power available and developing their technologies together.

CoreWeave said in its announcement that the partnership will include testing and validating its AI software and reference architecture, with the hope of including its offerings alongside Nvidia's for the chip maker's cloud partners and enterprise customers.

Intrator told Bloomberg that Nvidia's investments make up 2% of what the company is looking to spend to bring more data centers online.

"This year, we're going to deliver an enormous amount of infrastructure, and that's just going to accelerate over the next three years," Intrator told the publication.

Another driver of momentum for CoreWeave's stock on Monday was a bullish upgrade from D.A. Davidson analyst Alex Platt. He is upbeat about compute demand and says that at current prices, CoreWeave's stock sufficiently reflects risks such as scrutiny over its financing and data-center delays.

Platt said it's unlikely for CoreWeave's valuation to go higher without a catalyst to "significantly reduce both" counterparty risks and worries over its debt, but he thinks there could be more of those opportunities in 2026.

For one, if OpenAI can raise enough money to keep up its data-center commitments with CoreWeave, that would not only cut down risk to the company's backlog but also improve its financial agreements, Platt noted.

And low interest rates could help CoreWeave, Platt said, because reduced borrowing costs would lower "the returns deemed necessary by investors to be seen as [a] value-creating business."

-Britney Nguyen

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