Key Takeaways
- Shares of CoreWeave soared on Monday after the cloud provider expanded its partnership with AI chip giant Nvidia.
- CoreWeave was one of the stocks hit hardest by concerns about an AI bubble last year, when investors intensely scrutinized how companies are financing the data center boom.
Shares of CoreWeave jumped on Monday after the cloud computing company extended its partnership with Nvidia, a tie-up that last year helped fuel Wall Street’s AI bubble debate.
The companies on Monday announced they had expanded their partnership to accelerate CoreWeave’s development of AI data centers operating on Nvidia’s technology stack. Nvidia, which invested $250 million in CoreWeave during its IPO last March, agreed to invest an additional $2 billion in the company as part of the deal. CoreWeave agreed to deploy Nvidia’s latest products, including storage systems and a new central processing unit.
Coreweave (CRWV) shares were up 8% in recent trading, leading a relatively broad AI rally. Nvidia (NVDA) shares were down slightly.
Why This Is Important
CoreWeave’s partnership with Nvidia has raised red flags for many investors worried that tech companies are overestimating future AI demand and, thus, will struggle to recoup their massive investments in the technology. Those concerns appear to have abated somewhat as CoreWeave shares have rallied to start 2026.
CoreWeave stock has had a good start to the year, rising 40% since the start of the year as of mid-day Monday. The stock has regained some of the ground lost when AI bubble concerns weighed on tech stocks in the final months of 2025.
AI stocks slumped late last year as investors debated whether tech giants were spending too much, too fast on AI infrastructure with uncertain commercial prospects. That debate reached a new pitch last year when tech giants increased their reliance on capital markets to fund the AI infrastructure buildout that, up to that point, was mostly covered by cash flows.
CoreWeave, a so-called “neocloud” that doesn’t have the deep pockets of hyperscalers such as Microsoft (MSFT) and Alphabet (GOOG), was hit particularly hard by Wall Street’s scrutiny of debt-financed AI investment. CoreWeave shares lost more than half of their value between late October and mid-December when the AI bubble debate raged most fiercely.
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To some investors, CoreWeave’s partnership with Nvidia appears eerily similar to the business deals that fueled the Dotcom Bubble of the 1990s. Skeptics worry that Nvidia, by investing in CoreWeave and other companies that buy its technology, is subsidizing the AI data center boom. The partnerships, they argue, are reminiscent of the vendor-financing deals that encouraged telecommunications companies to overbuild fiber-optic networks that sat idle for years before internet demand materialized.
So far this year, the AI trade has been dominated by memory chip and data storage stocks. Shares of Sandisk (SNDK), Western Digital (WDC) and Micron (MU) have all soared amid a memory shortage, the latest bottleneck threatening to hamper AI development. The concerns about AI monetization that hit data center stocks last year are now dragging on the software industry.