Why CoreWeave and Axon Are Cornerstones of the AI and Public Safety Revolution

The twin revolutions of artificial intelligence (AI) and public safety technology are reshaping industries, and two companies—CoreWeave (CRWV) and Axon Enterprise (AXON)—are positioned to capitalize on these trends. With CoreWeave dominating the AI infrastructure space and Axon leading in AI-driven public safety solutions, both firms offer long-term growth potential for investors willing to weather near-term risks.

CoreWeave: The Engine of AI Infrastructure Growth

CoreWeave's Q1 2025 results underscore its explosive growth trajectory. Revenue surged 420% year-over-year to $981.6 million, fueled by soaring demand for its purpose-built AI cloud platform. The company's revenue backlog now stands at $25.9 billion, including a landmark $11.2 billion deal with OpenAI and partnerships with IBM for its Granite models. While CoreWeave reported a net loss of $314.6 million—largely due to stock-based compensation from its IPO—the company's adjusted EBITDA jumped 480% to $606.1 million, reflecting operational efficiency.

Addressable Market: The AI infrastructure market is projected to grow from $79 billion in 2023 to $399 billion by 2028 (CAGR of 38%), with CoreWeave targeting a significant slice of this pie. Its specialized GPU-driven infrastructure and partnerships with NVIDIA and Applied Digital (APLD) for scalable data centers further cement its lead.

Risks: High debt ($17.2 billion) and net losses remain concerns. However, CoreWeave's $7 billion 15-year lease with APLD ensures infrastructure expansion without capital constraints. The company's reliance on major clients like Microsoft (62% of 2024 revenue) poses concentration risks, but its backlog diversification—now including 1,400 AI labs via the Weights & Biases acquisition—mitigates this.

Axon: AI-Driven Public Safety Solutions

Axon is transforming law enforcement with AI integration. In 2024, revenue rose 33% to $2.1 billion, driven by Axon Cloud & Services (up 44% to $806 million). The company's Draft One software, which automates police incident reporting, saved officers 2.2 million minutes in 2024 alone. Axon's 2025 revenue guidance of $2.55–2.65 billion reflects confidence in its AI-powered products, including drone-as-a-responder technology via its Dedrone acquisition.

Addressable Market: Axon's Total Addressable Market (TAM) has expanded to $129 billion, encompassing global law enforcement, enterprise security, and emerging markets like drone surveillance. The company's real-time crime centers and partnerships with governments (e.g., Singapore's $9 billion AWS investment) highlight its global reach.

Risks: Regulatory scrutiny of police tech and competition in surveillance markets are hurdles. Axon's reliance on U.S. law enforcement budgets also exposes it to policy shifts, though its enterprise software model reduces this dependency.

Why Both Are Cornerstone Holdings

While CoreWeave and Axon operate in distinct sectors, their strategies share a common thread: AI as an enabler of transformation.

• CoreWeave is the “infrastructure backbone” of the AI era. Its backlog of $25.9 billion and 420% revenue growth signal that demand for AI compute is outpacing supply. The company's focus on scaling without diluting margins (adjusted EBITDA margin hit 62% in Q1) positions it to thrive as AI adoption expands.
• Axon is redefining public safety through AI. Its $129 billion TAM, including international expansion and enterprise solutions like Axon Body Workforce, suggests it can grow beyond traditional law enforcement markets.

The Risks, Mitigated by Long-Term Vision

• CoreWeave's debt and losses are offset by its recurring revenue model and strategic capital-light partnerships.
• Axon's regulatory risks are balanced by its diversification into enterprise and international markets.

Investment Thesis: Buy Both for the Long Run

For patient investors, CoreWeave and Axon represent rare opportunities to own leaders in high-growth, structural trends.

• CoreWeave (CRWV): The stock's 276% surge since its March 2024 IPO has been fueled by backlog growth and strategic moves. While volatility persists due to debt concerns, its $150 price target by late 2025 (per analysts) suggests further upside. A stop-loss below $100 would protect against overvaluation corrections.
• Axon (AXON): Its 25% revenue growth target for 2025 and $129 billion TAM justify a buy. The stock's stability compared to CoreWeave makes it a complementary holding for risk-averse investors.

Conclusion

CoreWeave and Axon are not just beneficiaries of AI and public safety trends—they are architects of them. CoreWeave's infrastructure dominance and Axon's AI-driven solutions give both companies decades of growth runway. While near-term risks exist, their strategic positions in transformative industries make them essential holdings for portfolios focused on the future.

For investors with a 5–10 year horizon, these stocks are not just bets—they're stakes in the next era of technology.