On September 16, a caller asked if CoreWeave, Inc. (NASDAQ:CRWV) is going to break out anytime soon, and Mad Money host Jim Cramer replied: Okay, so CoreWeave's got a yin and yang here. It's borrowing a lot of money and that's going to be harder now if the Fed starts raising rates, but it's smack in the middle of the great industrial buildout and so therefore I think it's going to be okay to buy. But it's become more speculative as the Fed raises rates.
It's become a more speculative situation and you got to think about that because that may not be what you really want. CoreWeave, Inc. (NASDAQ:CRWV) sits at the center of the artificial intelligence infrastructure boom, delivering exceptional financial expansion to back its market position. Second quarter revenue reached $2.58 billion, representing roughly 112% year-over-year growth.
Furthermore, the company commands a revenue backlog totaling $104 billion as of June 30, providing multi-year visibility and securing its place as an essential infrastructure provider for leading artificial intelligence developers. It is worth noting that the revenue backlog provided by the company in its latest earnings report does not include over $25 billion of net new customer commitments that were added in the third quarter of the year. Despite explosive top-line growth, CoreWeave, Inc. (NASDAQ:CRWV) carries heavy financial commitments that introduce substantial risk during a tightening monetary cycle.
CoreWeave reported $35.6 billion of total indebtedness as of June 30, while third-party financial databases report roughly $51.6 billion of total debt when lease liabilities are included. Servicing these substantial obligations requires continuous capital deployment, meaning that higher benchmark interest rates can increase borrowing costs on CoreWeave's floating-rate debt and put additional pressure on profitability. Insider Monkey tracking data shows that 71 hedge funds held a stake in CoreWeave, Inc. (NASDAQ:CRWV) during the second quarter, rising from 63 funds in the prior quarter.
At the same time, short interest stands at 17.84% of the public float, possibly showing how traders remain split over whether the heavy debt load will catch up to the company. Cramer's balanced view highlights the core duality of investing in high-growth artificial intelligence providers during a shifting monetary cycle. While the heavy reliance on debt introduces tangible risks if borrowing costs climb further, the massive revenue backlog and central role in the global technology buildout provide enough fundamental strength to justify a buy rating for risk-tolerant participants.
While we acknowledge the potential of CRWV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Jim Cramer on Arista (ANET) CEO: "She Is Money and the Company's Fantastic" and Jim Cramer Validates Caller's $1,400 Micron (MU) Thesis, Doubles Down on Charitable Trust Position.
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