The boom in AI has unleashed unprecedented demand for computing power. The surge has fueled massive growth for firms providing such infrastructure. Among them, Nebius Group (NASDAQ: NBIS) and CoreWeave (NASDAQ: CRWV) stand out as leading contenders.
Nebius shares have climbed more than 300% this year through mid-October. Meanwhile, CoreWeave’s stock, which debuted near $40 in March, has more than tripled. Both companies benefit from relentless AI spending, but investors wonder which offers greater potential returns.
CoreWeave’s rapid AI rise
CoreWeave began as a cryptocurrency mining company before transitioning to AI-focused cloud services. The shift proved transformational, as AI adoption surged worldwide. Its second-quarter revenue soared to $1.2 billion from $395.4 million a year earlier.
Major clients like OpenAI, Toyota Motor, and Microsoft significantly boosted CoreWeave’s sales. OpenAI even expanded its previous $11.9 billion deal to $22.4 billion in September. CoreWeave projects annual revenue between $5.2 billion and $5.4 billion, up sharply from $1.9 billion in 2024.
The company’s future orders reached $30.1 billion by Q2, nearly double last year’s figure. However, rising AI demand has driven operational costs higher. Expenses hit $1.2 billion in Q2, up from $317.7 million the previous year.
CoreWeave’s aggressive expansion required heavy borrowing. The firm reported over $10 billion in debt by the end of Q2. In July, it added $1.8 billion in senior notes and $2.6 billion in secured financing, intensifying investor concerns about sustainability.
Nebius Group’s accelerating AI performance
Nebius Group, like CoreWeave, delivers high-performance cloud infrastructure designed for AI applications. The company has mirrored its rival’s explosive trajectory. Q2 revenue soared 625% year over year to $105.1 million.
Nebius secured a multiyear partnership with Microsoft in September to supply computing resources. The company’s capital expenditures also surged 49% year over year to $91.5 million in Q2 as it expanded its data center capacity.
To support this growth, Nebius increased its debt from $6.1 million at the end of 2024 to nearly $1 billion by Q2. It also raised $4.2 billion through senior notes and equity issuance last month. Analysts note that Nebius’s financial structure now mirrors CoreWeave’s debt-driven strategy.
Both companies risk overextension if AI demand cools unexpectedly. Yet with the AI market growing rapidly, this concern may not become an issue soon.
Investment outlook for AI infrastructure stocks
The global AI boom continues to produce record-breaking opportunities for Nebius and CoreWeave. Industry projections show the AI market expanding from $255 billion in 2025 to $1.7 trillion by 2031.
Between the two, CoreWeave appears more attractive for now due to valuation metrics. Its forward price-to-sales ratio remains lower, suggesting better relative value. Investors, however, should remain cautious given both firms’ debt-heavy balance sheets.
CoreWeave may offer stronger upside potential, but its stock suits those comfortable with high risk. Prudent investors might wait for a price correction before considering an entry position.