Since debuting on the public markets earlier this year, CoreWeave (CRWV -2.33%) has swiftly established itself as a central character in the artificial intelligence (AI) infrastructure narrative.

Its latest milestone — securing a six-year, $14.2 billion deal with Meta Platforms — has further cemented its position and raised an important question for investors: Does CoreWeave merit a position in your portfolio right now?

What does CoreWeave do, and why is it important for AI infrastructure?

Unlike traditional hyperscalers such as Amazon Web Services (AWS) or Microsoft Azure, CoreWeave belongs to the emerging category of neoclouds — a new class of cloud providers designed to excel at one function above all else: delivering GPU compute power at scale. Instead of offering a broad suite of enterprise services, neoclouds specialize in rapid chip provisioning, building dense GPU clusters, and offering flexible pricing tailored to the needs of AI developers.

This business model matters because the foundational layer of AI infrastructure is shifting. The competitive edge now lies less in general-purpose compute and more in securing the right partners to deliver accelerated hardware at scale — removing supply chain bottlenecks in the process.

Simply put, companies pushing the frontiers of training large language models (LLMs), powering agentic AI systems, and running increasingly complex inference workloads require uninterrupted access to compute — downtime or resource constraints are not an option.

By making Nvidia GPUs available on demand through its cloud-based platform, CoreWeave directly addresses this pain point. Its ability to provide scale quickly and reliably has made the company an attractive solution for businesses demanding additional AI capacity beyond their own data centers.

Image source: Getty Images.

Who does CoreWeave compete with?

CoreWeave is not the only company capitalizing on the neocloud opportunity. Nebius Group recently secured a $17 billion deal with Microsoft, while Oracle signed a staggering $300 billion arrangement with OpenAI, the developer of ChatGPT. Even Iren, which was once focused on Bitcoin mining, is beginning to repurpose its power infrastructure to host Nvidia accelerators — a move that highlights the economic convergence between energy and compute.

Despite their differences, these players are stitched together through a common strategy: Lock in long-dated, high-value contracts with leading AI companies; use those agreements to finance massive data center buildouts; and scale rapidly to keep pace with secular demand trends.

For customers, these partnerships mitigate the risk of GPU shortages and help stabilize pricing mechanics. For providers, they offer visibility into revenue and cash flow growth in a market evolving at unprecedented speed.

Is CoreWeave stock a buy right now?

Interestingly, CoreWeave’s blockbuster contract with Meta comes on the heels of another multibillion-dollar deal with OpenAI. Together, these wins give the company an enviable backlog. Nevertheless, investors should weigh the full picture before pouring into the stock purely based on headline figures.

On the bullish side of the equation, CoreWeave has secured long-term demand at a time when GPU supply remains severely constrained and heavily concentrated among a handful of big spenders. These contracts provide scale, enhance credibility, and create more predictable revenue streams that could support margin expansion.

That said, the risks are equally pronounced. Neoclouds are inherently capital-intensive, often relying on vendor financing and circular structures where a company like Nvidia serves as both a hardware supplier and financial backer. This dynamic introduces a complicated layer of fragility should demand begin to slow, liquidity tightens, or existing customers migrate toward alternative chips (including their own custom silicon).

Given these factors, I see CoreWeave less as a reliable long-term compounder and more like a momentum stock riding the wave of AI-driven tailwinds. For aggressive growth investors seeking direct exposure to the GPU boom, CoreWeave could be a compelling opportunity on pullbacks. But for more conservative investors, the established hyperscalers still offer greater diversification and the safety of blue chip branding.