CoreWeave just kicked open a billion-dollar door

CoreWeave (CRWV) spent the bulk of 2025 in fast-forward. 

The Nvidia (NVDA)-backed AI cloud has effectively leveraged GPU scarcity into a bona fide business model, offering a one-stop solution that combines capacity, software, and support for customers seeking on-demand, high-performance AI infrastructure.

CoreWeave’s also riding a broader shift, becoming the poster child for neo-clouds. These specialized providers are tailor-made for AI training and inference, not generic compute, effectively going from niche to necessary. 

With models becoming larger and timelines becoming shorter, enterprises are seeking greater speed, throughput, and predictable queues, which is where CoreWeave remains a standout. 

Consequently, it's arguably been the most successful IPO of the year, with its stock priced at $40 a share, raising $1.5 billion, and a nearly $23 billion valuation. Despite the volatility, the stock has still risen nearly 250% since its IPO.

Now, it seems CoreWeave is entering a new phase of expansion, one that’s much larger than a logo swap or a new region. The latest move comes with longer contracts and mission-critical workloads, potentially reshaping the company’s growth curve for years.

CoreWeave takes its AI cloud to Washington and into a multibillion-dollar opportunity

CoreWeave has arguably made its biggest move yet, directly entering the highly lucrative federal market.

On Oct. 28, it announced CoreWeave Federal, a new division that caters to U.S. agencies and the defense industrial base. The goal is to pursue FedRAMP along with other security authorizations in delivering compliant, high-performance AI infrastructure across federal-level workloads.

“America’s economic competitiveness and national security rely on the continued advancement of secure, high-performance AI infrastructure,” said CEO Michael Intrator.

We will bring our platform to the federal market in alignment with the government’s rigorous standards to help agencies accelerate innovation and strengthen mission performance.

CoreWeave CEO Michael Intrator

For CoreWeave, the initiative opens up an entirely new lane, leading to steady, long-term top-line growth to offset the risks of commercial AI projects.

Federal agencies are adopting AI for simulation, logistics, and cybersecurity, but only through robust cloud offerings backed by strict compliance hurdles.

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If CoreWeave is able to land a FedRAMP approval, it could compete for programs linked to the Defense Department’s $9 billion Joint Warfighting Cloud Capability (JWCC), which has already issued a whopping $2.7 billion in task orders.

Needless to say, that’s a massive pot of recurring demand that smaller, specialized AI providers haven’t been able to tap as yet.

CoreWeave’s peers prove the payoff

Tech giants have flooded D.C., chasing sticky government gold.

Front and center is perhaps AI analytics giant Palantir, which has effectively turned government work into a potent growth engine, reporting Q2 2025 sales of $1.0 billion (up 48% year over year), with $553 million from government clients (up 49%). 

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Moreover, its new 10-year U.S. Army agreement, which is worth north of $10 billion, underscores the stickiness in federal spending.

Big Tech tells a similar story, where Microsoft’s Azure topped $75 billion in annual sales, and Amazon’s AWS brought in superb $29.3 billion in Q1 sales with $11.5 billion in operating income, both figures substantially boosted by powerful federal and defense workloads.

CoreWeave boasts an impressive financial runway 

CoreWeave’s plans with its government segment are ambitious, but it’s showing up with long-term contracts, healthy capitalization, and insurance baked in.

The AI cloud player is currently sitting at an enviable $42.9 billion bookings base, a cushion that many of its peers can only dream about.

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This includes a massive $22.4 billion in total commitments with OpenAI (following a $6.5 billion expansion this year), along with $14.2 billion tied to Meta, and $6.3 billion in initial orders from Nvidia.

Such impressive contracts give CoreWeave incredible bargaining power and visibility in scaling AI infrastructure for Washington.

Perhaps the Nvidia deal is the most important, as it comes with a unique "take-or-pay" style capacity backstop through 2032, de-risking CoreWeave’s expansion. Naturally, utilization rates and gross margins remain steadier compared to the typical boom-bust cycles associated with commercial AI training.  

Additionally, it comes with an armed balance sheet, backed by over $2.30 in cash per share, and $1.153 billion in total cash and short-term investments, per its latest quarterly report.

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