The Rise and Challenges of CoreWeave: An AI-Focused Company Backed by NVIDIA

In this episode of the Motley Fool podcast, hosts Anand Chokkavelu, Lou Whiteman, and Rick Munarriz delve into the latest developments in the world of stocks and investments. The trio begins by discussing Chewy, a pet supplies retailer that had a solid quarter with earnings per share slightly above expectations and revenue up 8% from last year. However, the company's guidance for the current quarter and full-year sales is slightly below consensus estimates. Despite this, Chokkavelu notes that the growth story at Chewy appears to be intact, which is what investors are looking for. Next, the podcast turns to CoreWeave, an AI-focused company backed by NVIDIA. Munarriz gives it a hype meter rating of three, noting that the company's origin story is a bit unusual. CoreWeave started as a hedge fund brothers' hobby of mining Ethereum, but when the crypto market crashed, they shifted gears and became a provider of cloud-based infrastructure for special effects companies and generative AI startups. The company generated $1.9 billion in revenue last year and is on track to top $5 billion this year. However, it's still losing money and deficits are widening. Munarriz cautions that while CoreWeave's business is booming, it's also attracting a lot of new competitors in the coming years, which could make it just another commodity market in the making. Whiteman adds that he loves equipment leasing businesses but is concerned about CoreWeave's model of loading up on debt to buy GPUs, which become outdated quickly. He notes that while he's not buying CoreWeave at the moment, he's intrigued by the company's potential. Finally, the trio discusses Sezzle's lawsuit against Shopify, with Whiteman noting that while he has a lot of respect for Sezzle, he doesn't see why Shopify should be stopped from working with a preferred partner in the buy now, pay later space. He also notes that the market seems to agree with this sentiment, as Shopify's stock was up on the day of the announcement while Sezzle's stock fell. Overall, this podcast provides valuable insights into the current state of the stock market and investment opportunities. Chokkavelu reminds listeners to always do their own research before making investment decisions. The original image of a pet supplies store can be seen below: