TLDRs;
Contents
- CoreWeave plunges 9% to $125.84 after announcing $9 billion Core Scientific acquisition
- Five-day slide nears 24% as investors reassess valuation after 368% IPO rally
- Nvidia-backed AI firm faces technical breakdown amid market uncertainty over deal
- Analyst outlook dims despite soaring revenue, backlog, and expanding data center footprint
CoreWeave shares tumbled 9% on Thursday to close at $125.84, marking a continued selloff following the company’s announcement of a $9 billion all-stock acquisition of Core Scientific.
The AI-focused cloud infrastructure firm has now plunged nearly 24% over five days, a sharp reversal after its staggering 368% post-IPO surge earlier this year.
The stock had enjoyed a meteoric rise since its Nasdaq debut in late March, when it launched at $40 per share. Backed by early and expanded investments from Nvidia, CoreWeave quickly earned top rankings among high-growth tech names. But its latest move to acquire Core Scientific, a data-center infrastructure player transitioning to AI-ready facilities, appears to have spooked investors.
Momentum breaks after massive rally
Before the deal was announced, CoreWeave’s rapid gains had propelled it to an all-time high of $187 in June. However, the rally lacked a sustainable technical base. Shares have since undercut key moving averages and breached their 21-day support level. The Relative Strength Rating, once a near-perfect 99, now faces downside pressure as the stock tries to stabilize.
The acquisition may have triggered a reassessment of valuation, especially given the all-stock nature of the deal and the potential dilution of current holdings. Technical indicators also reflect growing selling pressure, with the stock’s relative strength line slipping further below its peak.
Deal raises long-term AI infrastructure stakes
The $9 billion acquisition of Core Scientific, expected to close in the fourth quarter, is a bold bet on scaling CoreWeave’s AI cloud capabilities. Core Scientific, known for its Bitcoin mining infrastructure, has been shifting toward AI workloads and high-performance computing.
The move aligns with CoreWeave’s mission to provide enterprise-grade AI compute, but it also brings operational complexity and potential integration risks. The company currently operates 33 data centers across the U.S. and Europe and has preferred access to Nvidia’s powerful GPUs. The Core Scientific acquisition could expand that footprint but also draws scrutiny at a time when investors are hyper-focused on profitability and execution.
Nvidia’s backing not enough to calm the dip
Nvidia, which took a $100 million stake in CoreWeave in April 2023 and added $250 million just ahead of the IPO, remains a strategic partner. CoreWeave recently became the first provider to offer Nvidia’s RTX PRO 6000 Blackwell Server Edition, aimed at faster AI inference and text-to-video generation. That development briefly boosted the stock earlier this week, but selling quickly resumed.
Despite recent volatility, mutual fund interest has remained relatively strong. Institutional ownership stands at 12%, with a favorable Up/Down Volume Ratio of 1.4 and a solid Accumulation/Distribution Rating of A, signaling that large investors had been buying the stock in recent months. Whether that trend continues depends heavily on how markets digest the Core Scientific deal.
Revenue up, but earnings outlook dims
In the first quarter ending March 31, CoreWeave reported revenue of $981.6 million, up 420% year-over-year. However, losses widened to 31 cents per share from 5 cents in the prior year. The company ended the quarter with a massive $25.9 billion backlog, supported by partnerships including one with OpenAI. Still, analysts have trimmed expectations for the years ahead, now forecasting a $1.08 loss per share in 2025 and 19 cents in 2026.
CoreWeave remains a key player in the AI infrastructure race, but the recent market response suggests investors are weighing the costs of growth more cautiously than before.
