Nvidia's $900 million investment in CoreWeave signifies a strong belief in the AI sector, despite the volatility of the market. CoreWeave experienced significant growth post-IPO but is currently facing challenges with its stock returning to lower values. Investors should consider the potential risks associated with CoreWeave as it strives to expand amidst fluctuating momentum in technology stocks. Notably, CoreWeave's access to advanced Nvidia chips presents strategic advantages, even as the company's high price-to-sales ratio raises valuation concerns.
CoreWeave is growing fast, but shares are now in the process of going bust after that initial post-IPO boom. Undoubtedly, the AI infrastructure provider has a lot going for it, and while its multiple may seem absurdly expensive at around 19 times price-to-sales (P/S), with no price-to-earnings (P/E) multiple to go by, having quick access to Nvidia's newest and finest chips is a positive many may overlook.
Nvidia made early investors rich, but there is a new class of 'Next Nvidia Stocks' that could be even better. CoreWeave stock is coming back to earth. Growth investors who missed the post-IPO rally may have a shot to get in.
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