Image Source: Pixabay

CoreWeave (CRWV) stock price has plunged and moved into a bear market despite its strong revenue growth and artificial intelligence tailwinds. CRWV plunged to $93, down by 50% from the all-time high of $186. Its market cap has dropped from $101 billion to $50 billion.

CoreWeave business is growing 

Demand for data center is growing in the United States and other countries because of the ongoing artificial intelligence (AI) tailwinds. 

As hyperscalers like Google, Microsoft, and Amazon build giant data centers, other ‘boutique’ companies like Nebius and CoreWeave are doing the same and seeing strong demand.

The most recent results showed that CoreWeave’s business is thriving as demand for its solutions jump. These results showed that its revenue jumped by 207% last quarter to $1.2 billion. This quarterly revenue was much higher than what the company made in 2023. 

Most notably, its backlog continues to grow, reaching $30.1 billion, up by 86% from the same period last year. Most of this backlog came from its strategic deal with OpenAI, the creator of ChatGPT.

While the company continues to burn cash, other profitability metrics are doing well. For example, the adjusted EVITD jumped to $753 million and the adjusted operating income rose to $200 million. 

The main reason why the CoreWeave stock price has crashed is that its capital expenditure plans are enormous, raising the risk that it will need to raise cash to finance it. 

In its statement, the company guided that it would spend between $20 billion and $23 billion in capital expenditure this year. This is a big amount considering that it ended the last quarter with $1.6 billion in cash and short-term investments. 

CoreWeave’s borrowing has also increased, further raising concerns that it will raise money. It ended the quarter with $3.6 billion in current debt and $7.4 billion in non-current one. The CEO said:

“We are scaling rapidly as we look to meet the unprecedented demand for AI. Our purpose-built AI cloud platform continues to set new benchmarks for performance and scalability including becoming the first company to offer the complete Blackwell GPU portfolio at scale.”

The other key risk is that some parts of CoreWeave’s costs are soaring. One of these is depreciation and armotization, which jumped from $164 million in Q2’24 to $559 million in Q2’25.

CoreWeave stock price analysis

(Click on image to enlarge)

CRWV stock chart | Source: TradingView

The eight-hour chart shows that the CRWV stock price has pulled back in the past few months, moving from a high of $186 to $93. It has moved below the important support at $101.37, the lowest swing in June, invalidating the double-bottom pattern.

The stock has stalled at the 61.8% Fibonacci Retracement level and moved below the 50-period moving average. 

Therefore, the most likely scenario is where it remains under pressure for a while and then rebounds as it business trajectory accelerates. A rebound could see it rise to the resistance level at $148.65, up by 48% from the current level.

More By This Author:

Palantir Stock Price Crash: Buy The Dip Or Sell The Rip Today?
Oil Prices Slip Amid Reports Of Further OPEC+ Production Hikes
Rupee Defies Regional Weakness To Rise Against Dollar