CoreWeave (NASDAQ:CRWV) Stock Falls 10.1% – Here’s Why

CoreWeave Inc. (NASDAQ:CRWV) shares traded down 10.1% on Thursday. The stock traded as low as $53.50 and last traded at $55.60. Approximately 80,328,445 shares traded hands during mid-day trading, an increase of 161% from the average daily volume of 30,794,932 shares. The stock had previously closed at $61.82.

Trending Headlines about CoreWeave

Here are the key news stories impacting CoreWeave this week:

• Positive Sentiment: Bank of America maintained a Buy rating and a $140 price target, forecasting third-quarter revenue growth of 168% as new data-center capacity comes online. The view supports the bull case that strong AI-compute demand can drive substantial growth. CoreWeave capacity expansion to drive revenue growth, Bank of America says
• Positive Sentiment: Positive industry commentary provided some support: Nvidia CEO Jensen Huang and SpaceX executives have argued that demand for AI computing remains strong and that fears of a capacity glut may be exaggerated. Blackstone’s Jon Gray also said CoreWeave should be able to work through its financing pressure. Blackstone’s Jon Gray says CoreWeave can find a way through financing pressure
• Neutral Sentiment: Analysts remain sharply divided. Some see CoreWeave’s multiyear customer contracts, rapidly rising revenue and AI infrastructure demand as compelling, while others argue that heavy capital requirements and uncertain cash flows make the current valuation difficult to justify. CoreWeave stock may be near fair value following debt concerns
• Negative Sentiment: Bernstein’s downgrade and price-target cut intensified concerns about CoreWeave’s funding needs. Bernstein reportedly estimates a potential funding gap of $76 billion, substantially above Goldman Sachs’ estimate, raising questions about future borrowing, dilution and shareholder returns. Bernstein puts CoreWeave’s funding gap at $76 billion
• Negative Sentiment: CoreWeave’s bonds and credit-default swaps have signaled rising default risk. Bonds have traded at distressed yields, including a reported 9.625% yield on debt due in 2032 and nearly 16% on some other issues. Investors fear that higher financing costs could limit expansion or leave less value for shareholders. CoreWeave’s market confidence erodes as bond yields spike

Analysts Set New Price Targets

Several equities research analysts recently commented on the company. Weiss Ratings reiterated a “sell (d-)” rating on shares of CoreWeave in a report on Monday, September 21st. William Blair initiated coverage on CoreWeave in a research report on Wednesday, September 30th. They issued an “outperform” rating for the company. JPMorgan Chase & Co. raised shares of CoreWeave from a “neutral” rating to an “overweight” rating and lifted their price target for the company from $120.00 to $125.00 in a report on Thursday, September 24th. Btg Pactual set a $125.00 price objective on CoreWeave in a research note on Monday, September 21st. Finally, Rothschild & Co Redburn started coverage on CoreWeave in a report on Monday, September 21st. They set a “sell” rating and a $54.00 price target on the stock. Twenty-five equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and three have issued a Sell rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Moderate Buy” and an average price target of $131.57.

CoreWeave Stock Down 10.1%

The business’s 50-day moving average price is $84.98 and its 200-day moving average price is $94.22. The firm has a market capitalization of $25.51 billion, a PE ratio of -15.23 and a beta of 7.36. The company has a quick ratio of 0.46, a current ratio of 0.46 and a debt-to-equity ratio of 5.53.

CoreWeave (NASDAQ:CRWV) last released its quarterly earnings data on Tuesday, August 11th. The company reported ($1.14) earnings per share (EPS) for the quarter, beating the consensus estimate of ($1.52) by $0.38. CoreWeave had a negative net margin of 25.41% and a negative return on equity of 47.95%. The business had revenue of $2.58 billion during the quarter. During the same period in the previous year, the firm posted ($0.27) EPS. The firm’s revenue for the quarter was up 112.5% on a year-over-year basis. As a group, equities research analysts predict that CoreWeave Inc. will post -4.95 EPS for the current fiscal year.

Insider Activity

In other CoreWeave news, CFO Nitin Agrawal sold 22,579 shares of CoreWeave stock in a transaction on Monday, October 12th. The stock was sold at an average price of $80.13, for a total value of $1,809,255.27. Following the completion of the transaction, the chief financial officer owned 110,017 shares in the company, valued at approximately $8,815,662.21. The trade was a 17.03% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Michael N. Intrator sold 78,552 shares of the firm’s stock in a transaction that occurred on Wednesday, September 30th. The shares were sold at an average price of $87.69, for a total transaction of $6,888,224.88. Following the completion of the sale, the chief executive officer directly owned 548,935 shares of the company’s stock, valued at approximately $48,136,110.15. This represents a 12.52% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders sold 5,352,578 shares of company stock valued at $471,777,344. Corporate insiders own 24.20% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the company. Public Employees Retirement System of Ohio acquired a new stake in CoreWeave in the second quarter valued at $15,543,000. California State Teachers Retirement System lifted its position in shares of CoreWeave by 25.5% in the first quarter. California State Teachers Retirement System now owns 320,011 shares of the company’s stock valued at $24,791,000 after buying an additional 64,960 shares during the last quarter. Bank of New York Mellon Corp boosted its stake in shares of CoreWeave by 12.6% during the 1st quarter. Bank of New York Mellon Corp now owns 353,702 shares of the company’s stock worth $27,401,000 after acquiring an additional 39,599 shares during the period. Ardmore Road Asset Management LP raised its stake in CoreWeave by 3,410.0% in the 1st quarter. Ardmore Road Asset Management LP now owns 351,000 shares of the company’s stock valued at $27,192,000 after acquiring an additional 341,000 shares during the period. Finally, TD Waterhouse Canada Inc. boosted its position in CoreWeave by 30.6% during the second quarter. TD Waterhouse Canada Inc. now owns 73,470 shares of the company’s stock worth $7,313,000 after purchasing an additional 17,196 shares during the period.

CoreWeave Company Profile

CoreWeave, Inc is a specialized cloud computing company that provides infrastructure designed for artificial intelligence (AI), machine learning, and other high-performance computing workloads. Its platform gives customers access to accelerated computing resources, including graphics processing units (GPUs), along with the networking, storage, and software tools needed to develop, train, and deploy demanding applications.

The company offers cloud services for AI model training and inference, visual effects and rendering, scientific computing, and other data-intensive workloads.