CoreWeave Stock Crashes: What’s Dragging Down the Cloud Compute Giant?
Another day, another tech stock getting mauled by the market. CoreWeave—the GPU cloud darling that had VCs frothing—just got its wings clipped. Here’s why traders are hitting the sell button.
The bear case bites back
No earnings miss or scandal here—just the cold reality of a sector where ‘hypergrowth’ expectations meet gravity. When you’re valued like the second coming of NVIDIA, even stellar growth can disappoint. Wall Street’s a fickle beast.
Short sellers smell blood
Rumors swirl about squeezed margins as AI workloads shift. Some whisper about overpriced data center leases coming due. Others point to the elephant in the room: what happens when hyperscalers finally catch up on GPU supply?
The crypto parallel
Remember when ‘web3 infrastructure’ plays traded at 50x revenue? Neither do we. Today’s lesson: in tech, even the real disruptors eventually face the music. Maybe those ‘cloud compute moats’ weren’t so wide after all.
One hedge fund manager quipped: ‘Turns out renting GPUs isn’t quite the same as printing money—who knew?’ Brutal. But in this market, poetry gets rewritten in red ink.
Image source: Getty Images.
Investors had sky-high expectations for this AI cloud stock
After combing through CoreWeave's Q2 2025 financial results, investors WOULD be hard-pressed to find areas in which the company stumbled. CoreWeave posted revenue of $1.21 billion, beating analyst expectations that it would report sales of $1.08 billion.
With respect to profitability, CoreWeave reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $753.2 million, a notable increase over the adjusted EBITDA of $249.8 million it reported during the same period last year, and $606.1 million in adjusted EBITDA it reported during Q1 2025.
Another source of encouragement was the company's strong backlog growth. At the end of Q2 2025, CoreWeave had a $30.1 billion backlog, a 30.1% year-over-year increase.
This impressive growth helped motivate management to upwardly revise 2025 guidance. Whereas CoreWeave had projected 2025 revenue of $4.9 billion to $5.1 billion initially, it now expects to report $5.15 billion to $5.35 billion on the top line.
Does today's sell-off provide a solid buying opportunity?
Although there was a lot to celebrate regarding CoreWeave's Q2 2025 performance, it wasn't enough to placate investors who had lofty expectations. Fortunately for those who had been sitting on the sidelines, today's pullback in CoreWeave stock provides a great opportunity to start -- or add to -- a position.
It wouldn't be surprising if this pullback doesn't last and shares start to resume their upward trajectory in the very NEAR future. Appetite for AI exposure remains robust, and CoreWeave's position as a leading AI hyperscaler has made CoreWeave stock highly desirable for AI-focused investors.
