Jim Cramer Calls the NVIDIA Deal a “Fantastic Verification for CoreWeave”

CoreWeave, Inc. (NASDAQ:CRWV) is one of the stocks Jim Cramer put under the microscope. Cramer highlighted NVIDIA’s investment in the company, as he commented:

… NVIDIA announced that it invested another $2 billion in CoreWeave, buying 22.9 million shares at $87.20 per share. It was a fantastic verification for CoreWeave, demonstrating that it’s the preferred provider of NVIDIA chips. These are hard to procure. If you’re a big hyperscaler, you’re going to get a serious allocation. If you’re not, though, you know who to go to now. You can set up with NVIDIA by getting it through CoreWeave. This morning on Squawk on the Street, we got to interview CoreWeave founder and CEO, Michael Intrator, as well as Jensen Huang himself, coming from China to talk to us about the deal…

David (co-anchor David Faber) then asked the question on many minds of many skeptics, which is, isn’t this deal just one more example of vendor financing? NVIDIA gives CoreWeave $2 billion. Then CoreWeave turns around and buys product from NVIDIA… Would Michael Intrator take the money and spend it right back as part of a lazy Susan deal? You know what? I think that’s preposterous. That would presume that Jensen’s trying to make his quarter by spending money to get business. He has more business than he knows what to do with. That would presume that Intrator needs the cash, or he couldn’t buy the chips. But Intrator’s had no problem financing his purchases. Not only that, but CoreWeave has been selling its old chips for more than they paid for them because the market’s so tight. Many thought that the chips would be worthless after five years of depreciation. That was totally wrong. So why did NVIDIA do the deal? I think it wants to show the marketplace that CoreWeave is a great partner.

Image by Sergei Tokmakov, Esq. from Pixabay

CoreWeave, Inc. (NASDAQ:CRWV) runs a cloud platform designed to power and scale GenAI workloads with high-performance compute, storage, networking, and managed services.

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Disclosure: None. This article is originally published at Insider Monkey.