CoreWeave (CRWV) has been on a tear. The artificial intelligence infrastructure company has seen its stock price skyrocket by 174% over the past month. Behind this explosive growth is surging demand for CoreWeave’s cloud platform tailored for the booming AI sector.

CoreWeave’s ability to deliver high-performance computing infrastructure specifically designed for AI workloads is the primary catalyst for growth. The company operates a network of custom-built data centers across the U.S. and Europe, offering top-tier GPUs, CPUs, networking systems, and storage, which are essential tools for AI developers and enterprises. It also provides proprietary software and services, making its platform a comprehensive solution for next-gen AI applications.

While CoreWeave is poised to benefit from AI-driven demand, the recent rally in its share price raises concerns. With its share price appreciating significantly in value, Can CoreWeave continue to deliver, or is the stock overheating?

Strengths Behind CoreWeave’s Business

One of the core strengths of CoreWeave’s business model is its long-term, take-or-pay contracts. Customers typically commit to multi-year agreements, which usually span two to five years, thereby creating reliable and recurring revenue streams. This model provides the company with visibility into future revenues, and the latest backlog numbers suggest solid growth ahead.

CoreWeave’s first earnings report as a public company was nothing short of impressive. In Q1, the company reported $982 million in revenue, representing a 420% year-over-year increase, with adjusted operating income surging 550% to $163 million. These eye-popping figures show significant demand for its platform. Furthermore, its revenue backlog, essentially the value of contracts yet to be fulfilled, has increased to $25.9 billion, a 63% year-over-year rise.

As the demand for AI continues to surge, the need for robust and scalable infrastructure to support it will also increase. CoreWeave, with its leading AI infrastructure, is well-positioned to capitalize on this demand. CoreWeave is quickly building a substantial footprint, now operating 33 data centers across the U.S. and Europe. This extensive network positions the company to meet the infrastructure needs of AI-driven enterprises effectively.

Adding to its growth, CoreWeave recently inked a deal with OpenAI valued at up to $11.9 billion. It also signed a $4 billion expansion agreement with a major AI enterprise. These deals validate that CoreWeave is well-positioned to benefit from the AI's infrastructure boom.

Moreover, CoreWeave recently completed its acquisition of Weights & Biases, a widely used platform among AI developers. This acquisition adds a software layer to CoreWeave’s offering, enhancing its appeal to developers and deepening customer integration.

The company has also maintained its technological edge, becoming one of the first to deploy Nvidia’s (NVDA) new GB200 Grace Blackwell chips at scale.

Outlook Remains Strong

Looking ahead, for Q2, CoreWeave expects revenue to be between $1.06 billion and $1.1 billion, marking steady growth from the previous quarter. CRWV’s adjusted operating income is projected to be between $140 million and $170 million. For the full year 2025, CoreWeave anticipates revenue of $4.9 billion to $5.1 billion and adjusted operating income of up to $830 million.

Capital expenditures are expected to reach as high as $23 billion, reflecting the company's aggressive investment to keep up with red-hot demand.

The Bottom Line: Is CRWV Stock a Buy, Sell, or Hold?

There’s no denying that CRWV stock has momentum on its side. Its rapid rise reflects investor enthusiasm for companies poised to power the next generation of AI. However, such explosive gains often come with a dose of volatility. Furthermore, a shaky global trade environment poses challenges, which is why analysts are being cautious.

Currently, Wall Street gives the stock a “Moderate Buy” rating, which is a sign of cautious optimism.

While Wall Street is cautiously optimistic, CRWV has strong fundamentals working in its favor. The company’s long-term contract model helps ensure steady revenue, and its unique financing approach allows it to align spending with incoming cash flow, a big plus in an industry where upfront investments can be massive.

CoreWeave is seeing rising demand and is aggressively expanding its infrastructure to meet it. Further, its growing backlog suggests strong growth ahead. The stock may be due for some cooling after its recent run-up. However, with strong demand, a solid business model, and a smart growth strategy, CoreWeave could be a rewarding play in the long term.