CoreWeave has been the darling of Wall Street this year. Today, he is the “canary” warning against the AI bubble
Within six weeks CoreWeave lost 46%. value, and approximately USD 33 billion was lost from capitalization. This struck at the narrative in which AI infrastructure (GPU, data centers, energy) was supposed to be a certain part of the revolution – less glamorous than AI models, but more stable. Meanwhile, CRWV's quotations, after the euphoria surrounding the IPO in 2025, began to act as a litmus test for the sentiment towards the entire segment.
She was supposed to be the spark series of delays at large computing campus in Denton area (North Texas)which began with exceptionally heavy rainfall and winds, blocking construction works for approximately 60 days.
The problem quickly ceased to be a local obstacle because it concerns the planned computing power, among others. under contracts with OpenAI, and it hit the market at a time of growing sensitivity to any slip-up in large AI schedules.
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This is what she has come to nervousness on the part of investors when the company had to adjust its revenue expectationsindicating latency at the data center partner. There were also inconsistent messages from the management regarding the scale of the problem, which in the conditions of heated (and expensive) infrastructure financing may accelerate the sale more than the delay itself.
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“GPU under debt” model in analyses. Why CoreWeave became the face of AI bubble fears
CoreWeave operates in an extremely capital-intensive model. Invests in GPU fleet and data center capacity, a it finances its growth largely with debt.
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In the third quarter results, the company showed a jump in revenues to approximately USD 1.36 billion, but was still in the net negative (loss of approximately USD 110 million), with very high interest costs. This is exactly the mix that in the boom phase, it is sometimes rewarded for pace, but during the first slippages it starts to be priced for risk.
Doubts are intensified by customer concentration. According to Yahoo Finance, Microsoft was responsible for approximately 70 percent. CoreWeave's revenue in one of its most recent quarters, and the OpenAI deals are a big part of the growth story.
As the market begins to question the sustainability of margins in “GPU rental”, short-sellers' arguments get fuel. Jim Chanos, known, among others, from the bet against Enron, in recent statements warned that data centers and AI infrastructure could resemble past cycles of “high investment and low returns.”
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There is also the hard math of financing. CoreWeave has just reached for another large tranche of capital – the issue of convertible bonds increased to USD 2.25 billion. The market reads this as both evidence of investor demand and a signal that the appetite for cash is huge.
AND when the cost of capital rises, the “bubble” narrative spreads more widely. Oracle received a painful reaction from the market after weaker forecasts and very high expenses, and Broadcom, despite strong numbers, faced concerns about pressure on margins in the AI segment.
So CoreWeave has become a convenient symbol – a company in the middle of a boom, with a real increase in demand, but also with a model that requires perfect project execution and the constant availability of cheap financing. And that's why every rain in Texas, every schedule revision and every new debt issuance today they can cause a movement on the chart greater than the quarterly increase in revenues.
CoreWeave shares are still in positive territory since the beginning of the year, with a result of +78%.
Note: the information contained in the text is for informational purposes only and does not constitute an investment recommendation, information recommending or suggesting an investment strategy within the meaning of applicable regulations, or any other form of advice regarding the purchase or sale of financial products.
