CoreWeave (CRWV 9.17%) stock got off to a slow start following its public debut just over three months ago, but share prices started jumping in May and rose nearly 4x at one point in mid-June. The stock currently sits up almost 280% from its IPO price. The price jump isn't surprising, considering that the cloud infrastructure provider is growing at a stunning pace thanks to the booming demand for artificial intelligence (AI) model training and inference.

Investors' enthusiasm for CoreWeave stock is tied to the fact that the company rents out its graphics processing unit (GPU)-powered data centers to customers for running and deploying AI workloads. CoreWeave is seeing a phenomenal increase in its revenue in recent quarters, and it expects this remarkable growth to continue.

Given the fact that the stock price is already up so much in such a short time, is CoreWeave still worth buying now? Let's see if an answer presents itself.

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CoreWeave isn't cheap, but investors should look at the bigger picture

CoreWeave isn't profitable yet, as the company has been investing aggressively to ramp up its data center capacity to meet the incredible demand for its AI cloud infrastructure services. That means the price-to-sales ratio offers a more useful insight into how expensive CoreWeave is right now.

CoreWeave's sales multiple is 27. That's significantly higher than the U.S. technology sector's average sales multiple of just over 8. But a closer look at CoreWeave's recent quarterly results will make it clear why its expensive valuation is justified.

The company's revenue in the first quarter of 2025 jumped by more than 5x from the year-ago period to $982 million. Adjusted operating income jumped by 6.5x year over year to $163 million. Importantly, CoreWeave is bringing more customers on board, and that's inflating the company's revenue pipeline. On its latest earnings conference call, CEO Michael Intrator said:

In Q1, we completed a strategic deal with OpenAI, the contract value for which is up to $11.9 billion. We have also added new enterprise customers and a new hyperscaler and signed expansion agreements with several large customers, including a recent $4 billion expansion with a large AI enterprise, the details of which will be included in our 10-Q.

The new contracts won by CoreWeave led to a 63% jump in its revenue backlog to $25.9 billion last quarter. That figure is well above the company's 2025 revenue forecast of $5 billion. The impressive size of CoreWeave's backlog tells us why analysts are upbeat about its revenue growth for the next two years as well.

Data by YCharts.

However, there is a strong possibility that CoreWeave will blow past those analyst expectations because of two factors.

First, the company sees its total addressable market (TAM) expanding to a massive $400 billion by 2028. Management consulting firm McKinsey says that the demand for AI-ready data centers is expected to increase at a 33% annual rate through 2030. Even then, McKinsey estimates that the new capacity being built will not be enough to meet the demand, suggesting that companies like CoreWeave are unlikely to suffer from unutilized supply.

Second, CoreWeave is building new data centers at a healthy pace to capture a nice chunk of the TAM mentioned above. The company increased its data center capacity by 300 megawatts (MW) in the first quarter, bringing its total active data center capacity to 420 MW. CoreWeave currently has 33 purpose-built AI data centers, but that figure is likely to jump substantially since it has contracted 1.6 gigawatts (GW) of data center capacity.

That would be 4x its current capacity, suggesting that it can not only convert its terrific backlog into revenue but also get more business from new customers.

The stock isn't all that expensive when we look at other AI companies

We have seen that CoreWeave's sales multiple is more than 3x the U.S. technology sector's average. However, there are other AI stocks that are trading at much more expensive levels, and their growth rates are lower than that of CoreWeave.

SoundHound AI stock, for instance, trades at 38 times sales, while Palantir Technologies is way more expensive at 104 times sales. Both companies are delivering healthy growth, and their revenue pipelines are also improving, but CoreWeave is way ahead of them. In fact, CoreWeave's growth potential is so solid that it can deliver healthy stock price upside even if it trades in line with the tech sector's average sales multiple.

We saw in the chart earlier that its top line could jump to $16.6 billion in 2027. A sales multiple of 8 would send its market cap to $133 billion, up by 73% from the current level. As such, CoreWeave stock still seems worth buying as it isn't all that expensive when we take into account the remarkable growth that it could deliver in the future.