Cloud Computing Stock’s Power Move Makes it a Dominant AI Infra Play

CoreWeave’s (NASDAQ:CRWV) record post-IPO run isn’t the only tailwind propelling the stock, as recent moves mark a pivot toward being a fully vertically integrated AI infrastructure titan. 

By acquiring Core Scientific (NASDAQ:CORZ) in a $9B all-stock deal, CoreWeave has secured 1.3 GW of high-density data center capacity, slashing $10B in lease costs and locking in $25B+ in long-term contracts with giants like OpenAI and IBM. 

With Q1 2025 revenue soaring 420% YoY to $981.6M and a 62% EBITDA margin, this merger positions CoreWeave to dominate the AI compute surge, making it a high-conviction buy for tech investors chasing the next supercycle.

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Core Scientific Buyout: A Game-Changing Pivot

Earlier this week, CoreWeave announced its acquisition of Core Scientific in an all-stock transaction valued at $9B, set to close in Q4 2025. 

Core Scientific shareholders will receive 0.1235 CoreWeave shares per share, implying a $20.40 valuation per Core Scientific share. 

The deal’s benefits include:

• Eliminates over $10B in cumulative lease obligations over 12 years.

• Grants CoreWeave ownership of 1.3 GW of high-density AI data center capacity (with 1 GW+ potential expansion).

• Secures $25B+ in 12-year take-or-pay contracts, including milestone deals with OpenAI ($11.2B) and IBM. 

Additionally, the merger unlocks $500M in annual cost savings by 2027 through operational efficiencies and converts Core Scientific’s crypto-mining sites into AI hosting, adding ~$850M in annual revenue at 75–80% margins. 

This strategic move shifts CoreWeave from a high-cost GPU reseller to a self-sovereign AI infrastructure leader, de-risking its growth trajectory.

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Operational Overview and Recent Earnings

CoreWeave’s Q1 2025 performance underscores its explosive growth. Revenue hit $981.6M, up 420% YoY, driven by surging demand for AI workloads.

Adjusted EBITDA reached $606.1M, with a 62% margin, reflecting strong operational leverage. 

The $25.9B revenue backlog, bolstered by an $11.2B OpenAI deal, ensures multi-year visibility. 

CoreWeave’s deployment of Nvidia’s Blackwell platforms, including the RTX PRO 6000 and GB200 NVL72, positions it as the first hyperscaler to offer cutting-edge AI compute, enhancing its enterprise appeal. 

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Strategic Positioning & Competitive Advantage

CoreWeave’s acquisition of Core Scientific transforms it into a vertically integrated powerhouse. 

Owning 1.3 GW of data center capacity (equivalent to a nuclear reactor’s output!) gives CoreWeave a stranglehold on scarce AI infrastructure. 

Unlike rivals like Nebius, which diversify across industries, CoreWeave doubles down on high-margin AI compute.

The merger’s $500M annual cost savings and elimination of $10B in lease overhead enhance profitability, while customer-funded CapEx (e.g., $1.5M/MW from clients like OpenAI) minimizes financial strain. 

CoreWeave’s Nvidia partnership, including early access to Blackwell GPUs, cements its technological edge. 

Bear Case

The Core Scientific deal, while transformative, carries risks:

• Execution challenges could derail the conversion of 250 MW of capacity in 2025, undermining the promised $500M cost synergies. 

• Customer concentration is another concern, as OpenAI and Microsoft dominate CoreWeave’s backlog, and any pricing or demand shifts could disrupt revenue. 

• Power market volatility and regulatory scrutiny over AI data centers’ energy use pose margin risks, especially if pass-through costs misalign with actual power inflation. 

Finally, CoreWeave’s $17.2B debt and $314.6M net loss in Q1 highlight its cash burn, though customer-funded CapEx mitigates some concerns. 

CoreWeave’s Compute Conquest

CoreWeave’s bold acquisition of Core Scientific is a bet on owning the backbone of the AI revolution. 

By securing 1.3 GW of capacity, slashing $10B in leases, and locking in $25B in contracts, CoreWeave is redefining hyperscale compute economics. 

With revenue soaring and margins expanding, the company is a must-watch for tech investors. 

Despite a premium valuation (18.06x forward EV/Sales vs. peers’ 3.16x), CoreWeave’s strategic pivot makes it a high-conviction pick.