Better AI Stock: C3.ai vs. CoreWeave
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Which of these speculative AI plays has a brighter future?
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5 min read
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cryptocurrency
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July 10, 2025
08:05 AM
The Motley Fool
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Which of these speculative AI plays has a brighter future. 12%) and CoreWeave (CRWV -9. 60%) are both poised to fit from the expansion of the artificial intelligence (AI) market
C3 develops AI algorithms and standalone modules that can be plugged into an organization's existing software infrastructure
CoreWeave's data centers vide cloud-based GPUs for cessing AI tasks
C3 went public at $42 in December 2020, but it now trades at around $25
CoreWeave went public in March 2025 at $40, and it now trades at $160
Let's see why the bulls embraced CoreWeave while shunning C3 -- and if the former remains a better buy than the latter
Image source: Getty Images
Why didn't C3 impress the market
C3's revenue only rose 6% in fiscal 2023 (which in April 2023) as it grappled with tougher macro headwinds, faced intense competition in the AI space, and cannibalized some of its own subscriptions with its new consumption-based fees
It also faced an uncertain future as its joint venture with energy giant Baker Hughes, which regularly accounted for around 30% of its revenue, was set to expire at the end of fiscal 2025
All of those headwinds -- along with its declining gross margin and persistent losses -- drove away the bulls
Rising interest rates further compressed its valuations
However, C3's revenue grew 16% in fiscal 2024 and 25% in fiscal 2025
That acceleration was sparked by its new generative AI modules, more federal contracts, and its strategic partnerships with Microsoft, Amazon, and McKinsey
It also recently renewed its joint venture with Baker Hughes for another three years
It expects its revenue to rise 15% to 25% in fiscal 2026, while analysts anticipate 19% growth
From fiscal 2025 to fiscal 2028, analysts expect C3's revenue to grow at a compound annual growth rate (CAGR) of 22%
It looks reasonably valued at 7. 5 times this year's sales, but it won't break even anytime soon
In fiscal 2024, it abandoned its goal of turning fitable (on an adjusted basis) in favor of ramping up its investments in its generative AI modules
While C3 is still growing, it hasn't ven its model is sustainable yet
Its insiders also sold more than twice as many s as they bought over the past 12 months, and that chilly insider sentiment suggests its upside potential is limited
Why did CoreWeave's stock blast off
CoreWeave was originally an Ethereum mining company, but it repurposed its mining GPUs to cess AI tasks after the cryptocurrency crash of 2018
It subsequently opened more data centers, spent $100 million on Nvidia's H100 GPUs in 2022, and served up its cessing power remotely through its cloud-based platform
It also leveraged its GPUs as collateral to secure more funding and scale up its
It claims its dedicated cloud-based GPUs can cess AI tasks roughly 35 times faster at 80% lower prices than traditional cloud platforms
CoreWeave currently operates 33 data centers across the U
And Europe, up from just three centers at the end of 2022
It achieved that expansion with some big investments from Nvidia, Cisco, and PureStorage, and its top customers now include AI leaders Microsoft and OpenAI
From 2022 to 2024, its annual revenue soared from $16 million to $1. 9 billion -- but its net loss widened from $31 million to $863 million as it opened more data centers, bought more GPUs, and grappled with higher energy costs
From 2024 to 2027, analysts expect its revenue to grow at a CAGR of 105% to $16. 6 billion as it turns fitable in the final year
CoreWeave's stock still seems reasonably valued (but not cheap) relative to that growth trajectory at 16 times this year's sales
But most of its expansion was funded by big debt offerings, and it its quarter with an alarmingly high debt-to-equity ratio of 9
However, its insiders bought 19 times as many s as they sold over the past 12 months -- and that confidence suggests it could successfully scale up its and narrow its losses
The better buy: CoreWeave C3
Ai and CoreWeave are both still speculative AI plays
But if I had to pick one, I'd stick with CoreWeave because it's growing faster with a er path toward fitability than C3
C3 might keep expanding, but I'm not confident it can stabilize its while staying ahead of its competitors in the crowded enterprise AI software market
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors
Leo Sun has positions in Amazon
The Motley Fool has positions in and recommends Amazon, Cisco Systems, Ethereum, Microsoft, Nvidia, and Pure Storage
The Motley Fool recommends C3
Ai and recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft
The Motley Fool has a disclosure policy.
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