When thinking about the best-performing artificial intelligence stocks for 2025, one name that should immediately come to mind is CoreWeave.

CoreWeave positions itself as a “new cloud” company built specifically for AI workloads (rather than a traditional cloud service provider) and has deep ties to NVIDIA, both as a customer and an investment partner. In fact, CoreWeave has invested billions of dollars in state-of-the-art graphics processing units (GPUs).

That relationship has underpinned the company's rapid growth and investor enthusiasm, and is a key reason the stock has surged about 123% so far this year.

But after such a dramatic run, insiders began cashing out. In the third quarter alone, insider sales exceeded $700 million, while no insider purchases were made. Therefore, investors should question whether these insiders believe the stock is overbought.

Here's where the interesting distinction lies: About $370 million of those sales were made pursuant to 10b5-1 trading plans, which are pre-arranged and don't necessarily reflect insider sentiment.

Despite this, CoreWeave's approximately $350 million in insider sales in the third quarter were not included in the 10b5-1 plan. These sales were likely discretionary; insiders could control the timing and amount of their sales. As such, they offer deeper insights. At first glance, these sales appear to be a firmly bearish signal.

Interestingly, CoreWeave's share price is currently trading at approximately $93, approximately 12% below the average insider exit price. This could indicate a margin of safety for new investors. However, if insiders suggest $100-101 is the upper limit, it could also indicate limited short-term upside.

However, Wall Street analyst price targets contradict this view. MarketBeat's consensus price target for CRWV is around $107. Some bulls, such as Argus, believe the stock will rise to $200, while others, such as MoffettNathanson, have a price target of $65, indicating a wide divergence of opinion among analysts.

AI trade returns

Normally, when a stock rises 20%, there's definitely some solid news behind it. However, CoreWeave is a volatile, fast-growing stock that's increasingly becoming a battleground, so a double-digit gain is justified. Microsoft previously invested $17.4 billion in Nebius, and now Oracle is investing in it. Oracle announced in its fiscal first-quarter earnings report last night that it expects the company to grow 77% and accelerate from there, with its market capitalization expected to jump from $18 billion this year to $144 billion by fiscal 2030.

Shares of Nvidia, ARM, and AMD all rose on the news. CoreWeave doesn't work directly with Oracle, but its CEO Michael Intrato called it a formidable competitor.

Madrigal: Shares surge after insider buying and EU approval

While CoreWeave insiders are selling shares, they have been actively buying shares of healthcare stock Madrigal Pharmaceuticals.

MarketBeat tracked approximately $62 million in insider stock purchases in the third quarter, all from the hedge fund Baker Bros. Advisors LP, between August 18 and 20. The shares were purchased at an average weighted price of approximately $374. Since then, the stock has climbed to around $454, representing a nearly 20% gain for Baker Bros. in just a few weeks.

Interestingly, during the same quarter, Madrigal also saw insider sales of approximately $109 million, almost entirely through 10b5-1 plans. Similar to CoreWeave, these sales don't necessarily indicate bearish sentiment, while Baker Bros.'s intentional buying is more influential and a moderately bullish signal.

Notably, at the end of August, Madrigal's drug Rezdiffra received conditional approval from EU regulators, becoming the first and only approved treatment for metabolic dysfunction-associated steatohepatitis (MASH) in the EU. This opens up a whole new market for the company, and it is expected to begin generating sales in the coming quarters.

Following its approval in the U.S., Rezdiffra sales are projected to surge, climbing from approximately $15 million in the second quarter of 2024 to $213 million in the second quarter of 2025.

Madrigal believes that there are approximately 370,000 confirmed patients in Europe who could benefit from Rezdiffra, so there is also the potential for significant sales growth in Europe, which is a bullish signal for the stock price.

With strong institutional backing from firms like Vanguard, Paulson, and BlackRock, Madrigal appears poised for further gains.

CoreWeave's role: Intercepting hyperscale dominance

Since ChatGPT's public debut at the end of 2022, the AI craze has surged, and the valuations of AI-related stocks have revolved around hardware computing requirements. If everything has the potential to be AI-enabled, then the upper limit of AI demand is limited only by the power required for the workload.

This, in turn, has boosted valuations for utility stocks, especially nuclear power stocks like Constellation Energy. The three giants—Alphabet, Microsoft, and Amazon—continue to invest heavily in artificial intelligence, as it is clearly a technological pillar of US hegemonic influence.

This concentration is a major reason why Nvidia has become a $3.3 trillion company, as it offers a full AI stack ready to go. However, hyperscalers are also making their own AI chips.

For example, Alphabet is about to release Ironwood, which it claims is the “most powerful, highest-performing, and most energy-efficient TPU yet.” Similarly, Amazon is developing Trainium and Inferentia chips to scale AI infrastructure to suit the company’s needs.

So while Nvidia has benefited greatly from investments by large tech companies, it also faces challenges from these companies as core competitors in the long run. This is why CoreWeave became so important even before Nvidia's IPO, becoming a financial roulette wheel: Nvidia's cutting-edge chips generated demand for CoreWeave. CoreWeave's success generated revenue for Nvidia, and it generated capital gains from its previous holdings.

CoreWeave's financials: Huge demand, but also massive losses and debt

The company's financial data shows that its products are well-received by customers. By 2024, the company's revenue had grown exponentially by 737%. Furthermore, the company achieved operating profits, with an adjusted operating margin of 19% in 2024.

The company has about $15 billion in remaining performance obligations, indicating potential future revenue. That's roughly eight times the company's 2024 revenue. Despite this, the company remains deeply unprofitable overall, with net income of approximately -$863 million in 2024.

This is largely due to the company's massive debt load of nearly $8 billion. To service this debt, the company must pay $360 million in interest in 2024. The company is likely to take on even more debt, as it recently more than doubled its revolving credit facility to $1.5 billion. The numbers look even worse when considering free cash flow, which is projected to be close to -$6 billion in 2024. This is due to its $8.7 billion in capital expenditures for GPUs and related infrastructure.

Another worrying sign was that the company's three founders sold nearly $500 million worth of stock before the IPO. This was clearly not a sign of confidence in the company from the company's leadership.

CoreWeave's mission: to provide customers with cutting-edge AI infrastructure as quickly as possible

Understanding "AI cloud infrastructure" might seem daunting, but CoreWeave's business isn't. The company has amassed a fleet of approximately 250,000 NVIDIA graphics processing units (GPUs), advanced chips that power cutting-edge AI model training. The company rents these GPUs to other companies that want to use them to train AI models.

This is similar to what companies like Microsoft do with its Azure cloud business. But importantly, CoreWeave only rents out computing power for AI, unlike Microsoft and other cloud providers, which rent out computing power for both AI and traditional computing tasks.

CoreWeave takes its position as one of the first companies to get the latest GPUs very seriously. In its S-1 registration document, the company stated, “Our success depends on our ability to maintain innovation and technology leadership to maintain the competitive advantage of our solutions and bring the latest GPUs to market faster than our competitors.”

Being first to market with the latest GPUs is crucial for the company's customers. This allows them to develop more powerful AI models faster and more cost-effectively, giving them an advantage in the AI market. Furthermore, the rapid demand for these GPUs means that shortages are common.

CoreWeave's direct relationship with NVIDIA helps it avoid these shortages. CoreWeave enhances customer value by providing access to its proprietary software stack. This tool helps customers manage and optimize their leased computing power. Ultimately, it all comes down to one thing: helping customers train and deliver new AI models as quickly and cost-effectively as possible.