CRWV: CoreWeave Stock Wipes Out 33% in Two Days — Why Is the AI Player Doing So Bad?

Trouble in AI paradise? The AI cloud computing powerhouse nears a long-term support zone at $97 a share. From its peak, the stock has shed about half of its value.

📉 $25B Gone in Two Days

• CoreWeave stock CRWV has cratered nearly 33% in just two sessions, with the post-Q2 earnings selloff accelerating into a full-blown spiral. From its peak, the stock has now lost about half its value to a market cap of $48.5 billion.
• While second-quarter $1.2 billion revenue and adjusted operating income beat expectations, and management’s third-quarter guidance (a bigger ramp near year-end) was reasonable, the market still had a looming overhang.
• Thursday, the second day after the Q2 earnings release, marked the end of the IPO lockup period for big-shot holders. With insiders finally free to sell, the stock was always set up for volatility — earnings just lit the fuse.

⚙️ AI Expansion but at What Cost?

• But that’s in the rearview. What’s ahead is also a cause for concern. CoreWeave’s entire pitch is rapid-fire expansion of AI cloud infrastructure, serving heavyweight customers like Microsoft MSFT by packing data centers with GPUs from its backer, Nvidia NVDA.
• The problem: It’s expensive — very expensive. The company guided $20 billion–$23 billion in capex for 2025, with a “significant portion” coming in the fourth-quarter. What does that mean for the capex-to-revenue ratio? You don’t want to know.
• But we’ll tell you. It’s close to 500%, i.e. capex is 5x the annual revenue, assuming a revenue run rate of $5 billion. A typical ratio would be 20% of the revenue getting invested back into the business.
• Analysts estimate CoreWeave will need another $10 billion in debt this year to meet buildout goals. Interest expenses already outpace operating income, raising questions about how sustainable this growth is without burning shareholder value.

👀 From IPO Darling to Debt Watch, Real Fast

• CoreWeave went public in late March at $40 a share — a price that now feels like a distant memory given the fall toward long-term support near $97.
• The IPO rally quadrupled the stock to $149 at Tuesday’s close before earnings. But the combination of guidance jitters, insider selling, and funding concerns has erased most of those gains.
• Investors are now weighing whether the AI boom narrative can overcome the cold math of debt service and cash burn. Froth enters the chat and Intelligent Investor gets tossed into the bin?