NVIDIA (NASDAQ: NVDA) It has become a cash-generating machine. As demand for its GPUs soars amid the AI boom, its free cash flow has risen to $77 billion over the past 12 months. It recently put $2 billion of that cash to work, adding to its investment in Core tissue (NASDAQ:CRWV). The chipmaker now owns 11.5% of the company.
CoreWeave is a “neocloud” company, specializing in data centers designed for AI training and inference. It builds data centers and rents them to large technology companies, including microsoft, Goaland one of its largest investors, Nvidia. News of Nvidia’s increased stake in the business sent CoreWeave shares higher, so investors may be wondering if they should do the same after the big move.
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CoreWeave’s close relationship with Nvidia puts it in an excellent position to serve its customers. It has extensive access to Nvidia’s powerful GPUs, and the new deal with Nvidia ensures it will be able to build new cloud infrastructure using Nvidia’s Rubin platform, its Vera CPUs, and its BlueField storage system.
Additionally, Nvidia is acting as support for the development of CoreWeave. Nvidia is obligated to pay for any unused CoreWeave capacity through April 2032, up to $6.3 billion.
The plan is to use the $2 billion cash injection from the stock sale to accelerate CoreWeave’s construction of 5 gigawatts of AI data centers by 2030. But the cost of building those data centers is much higher than the $2 billion. CoreWeave spent $1.9 billion on capital spending in the third quarter and spent $6.9 billion on “construction in progress,” which it excludes from capital spending until implementation. Meanwhile, the company’s operating cash flow reached $1.5 billion during the first nine months of the year. As such, CoreWeave will still need to take on substantial debt to accelerate its data center construction plans.
Lenders are willing to give CoreWeave money based on its close relationship with (and endorsement of) Nvidia and the huge backlog of contracts CoreWeave has built up. At the end of the third quarter, CoreWeave had a backlog of $55.6 billion in customer contracts.
But interest on its debt is a huge drag on its profits, and the economics of building and leasing data centers are not yet paying off. Interest expenses totaled $841.4 million for the first nine months of 2025, roughly quadruple the amount for the same period in 2024. Meanwhile, operating income fell to just $43.6 million for the first nine months of 2025, down from $211.7 million. Even as CoreWeave grows and recovers its operating margin, interest and depreciation will continue to impact its net income.