CoreWeave Is Down 13% in a Week. Here's the Price at Which I'd Buy

What does CoreWeave do?

CoreWeave was once an Ethereum miner, but it repurposed its Nvidia GPUs to train AI models after the cryptocurrency market crashed in 2018.

Today, CoreWeave operates 51 data centers that run over a quarter million Nvidia GPUs to remotely process AI tasks. That streamlined approach enables it to process advanced AI workloads roughly 35 times faster and at 80% lower cost than larger cloud platforms. Its largest customers include Meta Platforms, Microsoft, OpenAI, and Anthropic. Nvidia also owns about 9% of CoreWeave, making it the company's top institutional investor.

CoreWeave went public last March. In 2025, its revenue soared 168% to $5.1 billion, and its adjusted earnings before interest, taxes, depreciation, and amortization rose 154% to $3.1 billion. Those explosive growth rates driven by the AI market's breakneck expansion dazzled investors, and the stock surged from its IPO price of $40 per share to a record high of $183.58 per share on June 20, 2025.

Why did CoreWeave's stock crash?

At its peak, CoreWeave's enterprise value hit $91.1 billion or 18 times the revenue it would generate in 2025. However, it struggled to maintain that premium valuation because investors were concerned about its steep losses and persistent dilution.

Even though its adjusted EBITDA was positive, it posted a net loss of $1.2 billion in 2025. That massive gap was driven by interest payments, equipment depreciation, lease and acquisition costs, and stock-based compensation, all of which were excluded from its adjusted EBITDA.

To stabilize its liquidity, CoreWeave issued more shares and convertible debt. That's why its share count has risen 28% since its IPO, and why it ended its latest quarter with $72 billion in total liabilities and a jaw-dropping debt-to-equity ratio of 14.3. Those glaring weaknesses suggested its business model wasn't sustainable yet, and the Fed's rate hike in September its first in three years made its messy balance sheet even less attractive.

How fast is CoreWeave growing?

By the end of the second quarter of 2026, CoreWeave's contracted revenue backlog had grown 246% year over year to $104 billion. For the full year, analysts expect its revenue and adjusted EBITDA to surge 151% to $12.9 billion, with adjusted EBITDA growing 144% to $7.6 billion. But on a GAAP basis, they expect its net loss to widen from $1.2 billion to $2.9 billion.

While CoreWeave's business is booming, it had only 1.85 GW of capacity at the end of June, compared to a contracted backlog of 4.2 GW. It expects to lease more data centers and buy more GPUs to narrow that gap next year, but that expansion will be costly.

For 2027, analysts expect its revenue to grow 106% to $26.5 billion, its adjusted EBITDA to grow 121% to $16.7 billion, and its net loss to narrow slightly to $2.8 billion. At its current enterprise value of $76.2 billion, it trades at just four times next year's sales and six times its adjusted EBITDA. Those low valuations should limit its downside potential, even if near-term concerns about rising rates and steep net losses weigh on its stock.

Why could it be the right time to buy CoreWeave?

CoreWeave clearly has a first-mover advantage in the neocloud space; it's firmly backed by Nvidia, and economies of scale should kick in as its business matures. I didn't love the stock when it skyrocketed after its IPO, but I think it's worth accumulating in the mid-50s as long as you can tune out the near-term noise and focus on its long-term growth potential.