CRWV Stock Slips Below Support as Financial Strain Weighs on Shares
CoreWeave’s attempted comeback has unraveled, with renewed selling pressure, rising debt, and fragile sector sentiment pushing the stock...
Quick overview
- CoreWeave's stock has fallen below key support levels due to renewed selling pressure and rising debt.
- Despite a brief recovery, the company's inability to maintain momentum has raised concerns about its financial stability.
- CoreWeave's partnerships, including a significant deal with Meta, have not alleviated investor worries regarding capital requirements and profitability.
- The company's heavy reliance on Nvidia and ongoing operational losses complicate its path forward in the volatile AI market.
CoreWeave’s attempted comeback has unraveled, with renewed selling pressure, rising debt, and fragile sector sentiment pushing the stock below key support levels.
A Fragile Recovery Gives Way to Renewed Selling
CoreWeave Inc. (NASDAQ: CRWV) has once again lost its footing after a short-lived rebound failed to gain traction. Following one of the steepest declines since its public debut, the stock briefly climbed back above $90 last week, recovering roughly $25 from its lows. That bounce followed a brutal November selloff in which shares plunged more than 60%, driven by underwhelming earnings and growing concern over the company’s aggressive expansion strategy.
The relief rally proved fleeting. Weak earnings from Oracle rattled confidence across the AI infrastructure space, reigniting fears that demand growth may not be sufficient to offset rising costs. CoreWeave fell sharply on Friday, closing near $78.59 and slipping to its 20-day simple moving average. As broader technology and AI sentiment deteriorated at the start of the new week, the stock broke decisively below that level, shedding another 8% on Monday. With support now compromised, attention has shifted back toward the November low near $65.
Technical Damage Undermines Investor Confidence
Recent price action reflects just how fragile sentiment remains. CoreWeave’s inability to hold above short-term moving averages signals that buyers lack conviction. The break below the 20-day SMA (gray) marks a clear technical setback and reinforces the view that the recent bounce was corrective rather than the start of a sustainable trend reversal.
CRWV Chart Daily – The 20 SMA Has Been Broken
This vulnerability is magnified by memories of prior failed rallies. Earlier this year, CoreWeave surged toward $150 before quickly reversing course, leaving many investors wary of chasing strength. The current breakdown below support revives fears that history may be repeating itself, particularly in a sector where momentum can evaporate quickly.
High-Profile Deals Fail to Offset Capital Concerns
CoreWeave’s partnerships continue to attract attention, but they have done little to stabilize the stock. The company’s widely publicized $14 billion agreement with Meta initially fueled optimism about long-term demand for its AI infrastructure. However, the scale of the deal also raised red flags. Investors quickly questioned whether CoreWeave has the financial flexibility to support such massive commitments without further straining its balance sheet.
More recently, CoreWeave announced a deal to support Runway’s next-generation AI video models using NVIDIA’s GB300 NVL72 systems. These workloads highlight the company’s expanding role in compute-heavy generative AI beyond text-based applications. While such contracts strengthen the growth narrative and could improve capacity utilization over time, they have not been enough to ease near-term concerns around funding, execution, and profitability.
A History of Extreme Volatility
CoreWeave’s stock has been defined by dramatic swings throughout the year. A powerful rally in June carried shares as high as $187 before profit-taking and risk aversion triggered a steep reversal. A subsequent rebound in September briefly lifted the stock back above $150, only for momentum to collapse again, driving prices down toward $65.
That low ultimately became a temporary floor as broader market conditions improved, allowing for the recent bounce. Yet the failure to build on that recovery underscores how sensitive the stock remains to shifts in sector sentiment. Even minor negative catalysts have proven sufficient to send shares sharply lower.
Debt Offering Raises Red Flags
Adding to the pressure, CoreWeave recently announced plans to raise $2 billion through a convertible senior notes offering, with an additional $337.5 million available via an over-allotment option. The notes, set to mature in December 2031, will pay semiannual interest in cash, though final pricing and conversion terms have yet to be disclosed.
The announcement unsettled investors, particularly given the stock’s recent weakness. Many view the timing as a signal that capital requirements are accelerating faster than expected. With shares already down significantly over the past month, the prospect of additional leverage and potential dilution has amplified concerns about financial risk.
Strong Revenue Growth, Deepening Losses
Operationally, CoreWeave continues to post eye-catching top-line growth. In the third quarter, revenue surged 105% year over year to $1.21 billion, reflecting strong demand for AI compute resources. However, that growth has come at a steep cost. Net losses widened to $290.5 million as the company poured nearly $3 billion into expanding its data-center footprint.
Looking ahead, analysts estimate annual capital expenditures could reach $20–$23 billion. Such spending levels have prompted caution from ratings agencies and institutional investors. Weiss Ratings, for example, has issued a bearish outlook, pointing to the growing mismatch between CoreWeave’s rapid expansion and its limited cash flow resilience.
Dependence on Nvidia Adds Strategic Risk
CoreWeave’s business model remains tightly linked to Nvidia, both technologically and financially. Agreements allowing Nvidia to purchase up to $6.3 billion of unused capacity tie CoreWeave’s utilization and pricing power closely to Nvidia’s production cycles. While the relationship provides access to cutting-edge hardware, it also limits CoreWeave’s ability to independently control margins.
Plans to acquire Marimo Inc. add another layer of financial complexity, increasing the strain on an already leveraged balance sheet. As a result, even with AI demand continuing to expand, questions persist about whether CoreWeave can scale profitably without taking on additional risk.
An Uphill Path Forward
CoreWeave’s failed rebound highlights the challenges of operating in a volatile, capital-intensive corner of the AI market. High-profile partnerships and rapid revenue growth underscore the company’s potential, but heavy debt, sustained losses, and technical breakdowns suggest the near-term outlook remains uncertain. Until financial pressures ease and confidence stabilizes, sustaining upside momentum is likely to remain a difficult task.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save