CoreWeave
The Good News (a.k.a. “Why everyone was hyped”)
They’re in hypergrowth mode – CoreWeave runs specialized AI-focused data centers in the U.S. and Europe. These aren’t your grandma’s data centers — they’re stuffed with top-tier GPUs, CPUs, ultra-fast networking, and massive storage, all built for hyperscalers and big enterprises.
They’re more than just hardware – CoreWeave has proprietary software and services, so it’s a full-stack AI platform, not just a server farm.
Numbers look amazing –
Revenue hit $1.21 billion in Q2, up 207% YoY.
Adjusted EBITDA jumped from $249.8M → $753.2M.
Operating income more than doubled to $199.8M.
Stock IPO’d at $40 and nearly tripled before earnings.
Guidance is strong – They expect Q3 revenue of $1.26–$1.3B (above Wall Street’s expectations) and raised their 2025 forecast to $5.15–$5.35B from $4.9–$5.1B. Management says this is because of high demand, expanded capacity, and a huge backlog.
The Bad News (a.k.a. “Why the stock tanked anyway”)
Post-IPO lock-up expiration – As of Aug. 14, early investors and insiders can finally sell. This often triggers big short-term sell pressure.
Pending acquisition – They’re buying Core Scientific (CORZ), which could dilute shares.
Debt is huge and growing –
Interest expense this quarter: $267M, up from $67M last year.
Analysts expect they’ll take on another $10B in debt by year-end.
CapEx came in lower than expected – For a hypergrowth AI company, lower capital spending could mean slower future revenue growth.
Valuation concerns – Even with great numbers, some investors think the stock is priced for perfection, so any hint of risk triggers selling.
The Stock Market Drama
Stock dropped 20.8% the day after earnings (Aug. 13).
Dropped again 11.4% on Aug. 14.
This is despite beating revenue/earnings expectations — showing that sentiment, insider selling risk, and debt fears are outweighing short-term results.
Bottom Line
CoreWeave is crushing it operationally and is one of the hottest plays in AI infrastructure… but it’s also:
Heavily leveraged
About to see insider selling
Facing execution risk if AI demand cools
This is a high-reward, high-risk situation. If you believe AI demand will keep exploding, this could be a monster long-term hold. If you think AI hype cools or debt catches up, the downside could be steep.
