Nvidia (NVDA) invested $350M in it CoreWeave (CRWV) before its IPO and now has a 7% stake. CoreWeave accounts for more than 86% of Nvidia’s $3.84B AI investment portfolio.
CoreWeave is down 60% from the June peak for a $39B market cap. The company posted $1.36B in Q3 revenue but continues to lose money despite strong growth.
Nvidia has committed to buying $6.3B of unsold CoreWeave cloud capacity by 2032, but this revenue backstop raises questions about real end-user AI demand.
If you are thinking about retiring or know someone who is, there are three quick questions that lead many Americans to realize that they may retire earlier than expected. take 5 minutes to learn more here
Nvidia (NASDAQ:NVDA) has amassed a strategic portfolio of public investments in AI-focused companies, including chip designers, data center operators, and infrastructure providers that not many investors are aware of. It consists of six holdings that at the end of the third quarter were valued at approximately $3.84 billion.
The dominant position is in CoreWeave (NASDAQ:CRWV), the specialized AI cloud provider that relies heavily on Nvidia GPUs and accounts for more than 86% of the portfolio’s value.
Nvidia invested $350 million in CoreWeave in two tranches ahead of its March IPO. After originally investing $100 million in April 2023, it invested another $250 million just before its public debut, giving it a total of about 24.2 million shares at $40 per share, and getting a 7% stake for Nvidia.
After the IPO, CoreWeave hit an all-time high of $187 per share in June, but has been on a fairly steady decline since then. Despite nearly doubling from its IPO price, the stock is down nearly 60% from that peak. On Friday, it suffered another 10% drop, bringing its market capitalization to about $39 billion — a sharp erosion from the nearly $80 billion it was worth at the end of June.
Most of Friday followed an SEC Form 4 filing that revealed Chief Financial Officer Nitin Agrawal sold 66,467 shares on Dec. 11 at an average price of $82.58, totaling about $5.49 million. While investors are often reminded to ignore insider sales because they can sell stock for any reason — or no reason at all — those made by CFOs should be noted for their specialized knowledge of company finances.
However, the Agrawal transaction resulted from the vesting of restricted stock units, with the sale covering associated tax withholding obligations. Insider selling is common with RSU vesting and often serves administrative purposes rather than indicating fundamental concerns. This was a non-event for CoreWeave, and Agrawal still owns more than 203,000 shares after the sale.
However, CoreWeave’s challenges reflect a broader skepticism about the growth trajectory of the AI sector. Analysts and investors have highlighted a potential dynamic of “circular financing”, where Nvidia provides investments or capacity commitments to customers who buy its hardware.
CoreWeave’s arrangement with Nvidia includes a $6.3 billion deal under which Nvidia commits to buying any unsold cloud computing capacity through April 2032, providing a revenue backstop but raising questions about true end-user demand.
Across the industry, major tech companies are increasingly relying on debt to fund expansive AI infrastructure projects as operational cash flows prove insufficient. Meta Platforms (NASDAQ:META) issued $30 billion in bonds in 2025 to support data center expansions, and An oracle (NYSE: ORCL ) just faced investor backlash after its Q3 earnings. Its stock fell 15% on concerns about debt levels exceeding $100 billion and negative free cash flow tied to AI commitments.
These developments have sparked debates about the risks of overinvestment, potential undercapacity, and the long-term profitability of building AI.
For CoreWeave, despite reporting strong Q3 revenue of $1.36 billion (up significantly year-over-year) and a substantial backlog, the company posted ongoing net losses and relied heavily on debt financing, including a $2.6 billion convertible note offering completed just this month, albeit at a low interest rate of 1.75%.
High capital expenditures for data center expansion – projected to be in the tens of billions of dollars over the next few years – are seen as a strain on its balance sheet.
CoreWeave is the primary drag on the performance of Nvidia’s investment portfolio. Although five of the six holdings have declined since the end of the 3rd — contributing to a significant overall decline in portfolio value — CoreWeave’s 42% decline was roughly double that of the next biggest loser, Nebius group (NASDAQ:NBIS), which fell 22%. Only Applied Digital (NASDAQ:APLD) recorded gains during this period.
Analysts maintain a generally positive view on CoreWeave, however, citing its revenue growth, customer relationships, and backlog as supporting factors. However, a sustained recovery depends on demonstrating profitable execution, managing leverage effectively, and proving that there is an enduring demand for AI in the face of questions about funding and sustainability. Until you can prove that, I won’t be buying into CoreWeave just yet.
Most Americans drastically underestimate how much they need to retire and overestimate how prepared they are. But the data shows that people with one addiction have more than double saving those who don’t.
And no, it has nothing to do with increasing your income, saving, cutting coupons, or even reducing your lifestyle. It’s much simpler (and powerful) than either of those. Frankly, it’s shocking that more people don’t take up the habit considering how easy it is.
