Unlocking AI Stock Potential: CoreWeave, Nvidia, and Microsoft Insights
Explore how AI stocks like CoreWeave, Nvidia, and Microsoft are reshaping investing in 2025, with expert fund strategies and billionaire backing driving growth in this transformative sector.
Key Takeaways
- CoreWeave’s revenue surged from $189M to $982M in Q1 2025
- Nvidia leads AI hardware with Blackwell GPU and CUDA ecosystem
- Microsoft integrates AI deeply via Azure and OpenAI partnership
- Alger Focus Equity Fund’s AI picks include Meta, AppLovin, and Talen Energy
- Energy demand from AI data centers boosts independent power producers
Artificial Intelligence is no longer a distant dream—it's a $20 trillion economic force reshaping industries and portfolios alike. Investors eye AI stocks like CoreWeave, Nvidia, and Microsoft as gateways to this revolution. CoreWeave’s explosive revenue growth and massive contracts, including a $11.9 billion deal with OpenAI, spotlight the infrastructure powering AI’s rise. Meanwhile, Nvidia’s GPUs and Microsoft’s AI-infused cloud services anchor the sector’s innovation. Fund managers at the Alger Focus Equity Fund lean heavily into AI, blending household names with lesser-known gems like Nebius and Talen Energy. This article unpacks these AI investing opportunities, busts myths about tech volatility, and offers fresh perspectives on capturing AI’s financial upside in 2025.
CoreWeave’s Explosive Growth
Imagine a company riding the tidal wave of AI’s infrastructure boom—CoreWeave fits that picture perfectly. This pure-play AI data center operator recently went public and wasted no time showing its muscle. Revenue rocketed from $189 million in Q1 2024 to a staggering $982 million in Q1 2025. That’s not a fluke; it’s a signal of massive demand for AI-optimized cloud computing. A jaw-dropping $25.9 billion revenue backlog, up 63% year-over-year, includes an $11.9 billion contract with OpenAI, the brains behind ChatGPT. This backlog isn’t just numbers on a page—it’s a promise of future cash flow that investors love.
But powering AI isn’t just about servers; it’s about juice—lots of it. CoreWeave’s 33 data centers across the U.S. and Europe run on 420 megawatts of power, with contracts securing up to 1.6 gigawatts over multiple years. This foresight tackles a common myth that data centers can’t keep up with AI’s appetite. CoreWeave’s $53 billion market cap and a forward price-to-sales ratio of 11 reflect a fair valuation for a company fueling AI’s backbone. For investors, CoreWeave isn’t just a stock; it’s a front-row seat to AI’s infrastructure revolution.
Nvidia’s AI Dominance
When it comes to AI hardware, Nvidia is the undisputed heavyweight champion. Its GPUs are the engines behind AI’s most complex models, from cloud computing to self-driving cars. The company’s CUDA software ecosystem creates a moat, locking in developers and enterprises with high switching costs. Nvidia’s Blackwell architecture, launched in 2025, continues to push the envelope, powering the AI boom.
Wall Street analysts and billionaire investors like Ken Griffin and Jim Simons are piling in, signaling confidence that Nvidia’s growth story isn’t slowing. The company reported record revenues and robust margins, riding the wave of generative AI and large language models. This isn’t just tech hype; it’s a financial juggernaut. Nvidia’s blend of hardware innovation and software dominance makes it a cornerstone for anyone looking to tap into AI’s soaring demand.
Microsoft’s AI Integration
Microsoft’s AI journey is a masterclass in strategic integration. From embedding AI into Azure’s cloud services to rolling out Copilot in Office 365, Microsoft is weaving AI into the fabric of everyday business. Its partnership and stake in OpenAI amplify its AI credentials, making it a powerhouse in both enterprise and consumer AI applications.
The Alger Focus Equity Fund highlights Microsoft as a top AI pick, praising its deep AI integration and growth runway. Despite economic headwinds that usually curb ad spending, Microsoft’s AI-driven tools have helped it stay resilient. Its stock climbed 7.1% over the past year, outperforming some tech peers. For investors, Microsoft offers a blend of innovation, scale, and financial strength—a trifecta that’s hard to beat in the AI race.
Alger Fund’s AI Picks
The Alger Focus Equity Fund is like a savvy AI treasure hunter, blending household names with under-the-radar gems. Managers Ankur Crawford and Patrick Kelly call AI the biggest trend of their lifetimes, and their fund’s 4% gain in 2025 beats the large-growth category’s 1.1% loss. Their portfolio includes Meta and AppLovin, both leveraging AI to revolutionize ad targeting. AppLovin’s stock soared over 350% in the past year after expanding into e-commerce ads, while Meta’s AI investments helped it weather economic slowdowns, with a 34% stock gain.
Not all picks shine equally—Pinterest, also AI-focused, lost nearly 25% due to advertiser concentration in struggling sectors and trade war impacts. Yet, optimism remains as its CEO pushes AI innovation. The fund also taps into AI’s ripple effect on utilities, holding independent power producers like Talen Energy, whose stock doubled amid surging electricity demand from data centers. This diverse approach busts the myth that AI investing is only about flashy tech stocks—it’s an ecosystem play.
Energy’s AI Surge
AI’s hunger for computing power has sparked an unexpected renaissance in the utility sector. Data centers guzzle electricity, and independent power producers like Talen Energy are cashing in. Talen’s stock more than doubled in the past year, fueled by long-term contracts with tech giants paying premiums for reliable power. Nuclear plants, prized for their steady output and low emissions, add to the appeal.
This surge challenges the sleepy stereotype of utilities. As Patrick Kelly from Alger notes, U.S. electricity demand was flat for two decades but is now climbing sharply, driven by AI, reshoring, and electric vehicles. Independent producers can strike deals traditional utilities can’t, locking in predictable profits that investors value. This energy angle broadens AI investing beyond chips and software, revealing a layered opportunity that savvy investors shouldn’t overlook.
Long Story Short
AI investing is more than hype—it's a strategic play backed by soaring revenues, billionaire endorsements, and fund manager conviction. CoreWeave’s rapid growth and long-term contracts reveal a business built for the AI era’s power demands. Nvidia and Microsoft combine innovation with financial muscle, making them pillars of AI’s future. The Alger Focus Equity Fund’s diverse AI portfolio, spanning tech giants to energy firms like Talen, underscores AI’s broad economic impact. Yet, investors should watch power supply challenges and market volatility. Embracing AI stocks means betting on transformation, but with data-driven insight and patience, the rewards can be substantial. The relief of owning companies fueling tomorrow’s tech is a feeling every investor seeks—AI offers that chance today.