CRWV Stock Resumes Decline As CoreWeave Expansion Fails to Impress- $100 Next?
After closing a $14 billion transaction with Meta, CoreWeave's shares surged, but the joy is soon waning due to persistent concerns about...
Quick overview
- CoreWeave's stock initially surged after a $14 billion deal with Meta, but concerns about profitability and dependence on Nvidia have dampened enthusiasm.
- Despite a significant revenue increase, the company faces mounting losses and high capital expenditures, raising questions about its financial sustainability.
- The acquisition of Marimo Inc. aims to enhance CoreWeave's AI capabilities, but analysts warn it adds complexity during a time of heavy infrastructure commitments.
- Renewed U.S.-China trade tensions and a 'Sell' rating from Weiss Ratings further contribute to the stock's volatility and investor uncertainty.
After closing a $14 billion transaction with Meta, CoreWeave’s shares surged, but the joy is soon waning due to persistent concerns about profitability, reliance on Nvidia, and escalating geopolitical tensions.
Rebound Masks Lingering Weakness
After a brutal summer slide, CoreWeave Inc. (NASDAQ: CRWV) briefly regained momentum in September, surging back above $150 after plunging 55% from its June highs. But the rebound already shows cracks — shares have slipped another 30% since, including a 6% drop today, as traders question whether the rally has real legs.
CRWV Chart Daily – Can MAs Hold As Support or Give Way to Sellers?
The stock’s 20-week moving average has turned into resistance again, a bearish technical shift hinting that selling pressure could persist. For a stock once hailed as a key AI infrastructure play, momentum has clearly lost steam.
Meta Deal Lifts Profile, Not Confidence
CoreWeave’s comeback was fueled by news of a $14.2 billion partnership with Meta Platforms (META) to supply long-term AI processing power through 2031. While the deal positions CoreWeave as a major infrastructure provider for Meta’s AI systems, it also highlights a growing concern: AI expansion is enormously expensive.
Analysts note that such capital-heavy contracts lock the company into massive spending cycles, forcing constant hardware upgrades just to stay competitive. What once looked like a validation of CoreWeave’s platform now underscores how fragile AI cloud margins can be.
Acquisition Adds Ambition — and Complexity
CoreWeave also announced plans to acquire Marimo Inc., the developer of the open-source Marimo notebook for AI and data workloads. The integration aims to enhance its cloud-based ecosystem and accelerate developer tools for AI applications.
However, some analysts view this as another costly expansion at a time when CoreWeave is already straining under multibillion-dollar infrastructure commitments.
Dependence on Nvidia Raises Red Flags
Earlier this year, Nvidia (NVDA) agreed to purchase up to $6.3 billion in CoreWeave’s unused cloud capacity through 2032 — a move that offers stability but also exposes CoreWeave’s dependence on its biggest supplier.
The two firms’ partnership strengthens near-term cash flow but blurs independence, with CoreWeave’s fortunes now tightly linked to Nvidia’s production cycles and pricing power. Such reliance could limit CoreWeave’s flexibility and bargaining strength over time.
Trade Tensions and Market Pressure Deepen the Slide
Adding to the headwinds, renewed U.S.–China trade tensions have rattled tech investors. Comments from President Trump threatening to sever trade ties have reignited market fears, especially for high-valuation firms already battling rising costs.
Weiss Ratings recently reaffirmed a “Sell (D+)” rating on CoreWeave, citing overvaluation and excessive capital spending — a warning that investors appear to be taking seriously.
Revenue Grows, But Losses Mount
CoreWeave’s Q2 results showed strong top-line growth, with revenue surging 105% year-on-year to $1.21 billion and a $30 billion order backlog. Yet, net losses ballooned to $290.5 million, driven by nearly $3 billion in data center investments. With projected spending of $20–23 billion annually, analysts warn the company may be scaling too fast for its own balance sheet.
Unless CoreWeave can demonstrate sustainable profits, the latest rally risks becoming another temporary bounce in an increasingly crowded cloud hysteria.
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