CoreWeave
It’s been three months since we placed CoreWeave on our weekly watchlist, and since then, the stock has posted a historic rally, climbing from its April lows of $33.52 to a high of $187.00. It was expected to be one of the hottest IPOs of the year, and it certainly lived up to the hype, judging by the influx of buyers. However, as with any IPO, investors should remain cautious for at least 4 to 6 earnings cycles before fully trusting the company’s long-term potential.
CoreWeave has reported one quarterly earnings so far, which partially fueled its rally from IPO lows.
Q1 earnings reflected $981 million in revenue, a strong jump from $188 million during the same period last year (before going public). However, despite the revenue growth, the company’s losses widened, a red flag for a business that ideally shouldn’t have such high overhead. Still, the company is young enough that investors are willing to overlook the losses and focus on the revenue growth story.
But does a company barely generating $1 billion in annual revenue truly deserve a $62 billion valuation? Even our April analysis didn’t project such a high target. At that time, we estimated the stock could reach $46.00 to $48.00, which it did before continuing to surge. This may be due to its promising backlog, which stood at $29.9 billion as of May 2025, with only 25 percent expected to be converted annually over the next 4 to 5 years. While impressive, several red flags remain regarding CoreWeave’s business model.
Most notably, CoreWeave’s largest customer accounted for 72 percent of revenue in the first quarter, making the company highly vulnerable to any changes that customer might make. To add to the concern, that customer is Microsoft, which has the financial power to bypass CoreWeave and go directly to Nvidia for GPU and cloud access.
CoreWeave stands out for pioneering a creative way to give companies access to high-performance GPUs without requiring them to purchase the hardware, essentially acting as a GPU leasing company. But the model may not remain competitive due to its narrow focus in both product and customer base. The balance sheet is also heavily tied to Nvidia GPUs, which could quickly depreciate as new technologies emerge from Nvidia or its rivals.
As it stands, the business appears significantly overvalued. CoreWeave needs to broaden both its service offerings and customer base. While some high-risk traders may still chase the stock amid ongoing AI hype, investors like myself prefer to stay on the sidelines and wait for more earnings data and signs of business expansion.
CRWV Technical Analysis:
From a technical standpoint, CRWV may see a bounce soon given it’s still a hot name in AI, but that bounce would purely be chart based, not based on financial performance (unless there’s a specific financial catalyst or new contract). The stock seems to be trying to build a base at 122.00, making that the closest support. Buyers need to get above 135.00 to have a chance at retesting the strong 147.00 resistance.