CoreWeave entered the market in 2025 like a rocket powered by Nvidia GPUs, and it immediately joined the status of the most talked about companies in AI infrastructure. Investors were captivated by its tale of overwhelming demand, access to Nvidia’s prime chips, and a clever enterprise model that allowed clients to rent strong computing power without setting up their own data centers.

However, six months later, the scenario has changed. CoreWeave has lost 30% of its value in six months, which is more than 50% from its 52-week peak of $187. This situation leads the investors to wonder, whether this is a rare buying opportunity or just the fall of an AI-hype.

CoreWeave’s Business is Doing Good

However, we must acknowledge that CoreWeave’s basic business has not been affected badly. The company is consistently demonstrating revenue growth and is grabbing the attention of the stock market, with its latest results announcement showing an increase in revenue that is more than doubling year over year. Its backlog also almost doubled, and reached to $55 billion, which is not the kind of figure you have when the customers are losing interest.

Hyperscalers’ demand has been a key factor in driving this value, which also included a multiyear deal, worth over $14 billion, with Meta Platforms for AI workloads. In other words, companies still need CoreWeave’s products and they need huge quantities of it.

Growth Isn’t the Problem

So what exactly led to the decline in share price? The answer to that question is quite simple, but it is equally an uncomfortable one. Its expensive price is the reason behind such a decline. At a certain point, CoreWeave’s market cap reached around $88 billion, which indicated near-perfect performance and an extremely smooth climb towards profitability.

That’s a tough challenge for any corporation, specifically for the one who has a capital-intense business. The moment the excitement vanished, investors began to analyze the details, where the valuation turned out to be more of a stretch than a bargain.

Losses That Are Hard to Ignore

CoreWeave is still certainly unprofitable despite the strong increase in revenue. The company reported net losses of over $715 million for the first nine months of 2025. Although the amount is better than last year’s figure, it still shows that growth alone cannot cover the cost.

Its interest expense is even more troublesome. CoreWeave accumulated more than $840 million in net interest cost in the same period, which is far more than its operating profit. This shows us that it is not only a margin problem, but also a structural one, which is related to the costs of scaling such a business.

Unpleasant Market Reality

Running a massive AI infrastructure certainly costs a lot, and CoreWeave’s balance sheet is a testament to that. Heavy borrowing to fund growth has made the company vulnerable, specifically in a market that has become very hard to please and is no longer tolerant of cash-burning growth stories.

As the heat wore off, many investors came in early to lock their profits, which pushed the share price lower. The sell-off is more of a collective realization that even AI has to obey the laws of financial gravity.

Is This a Bargain or a Value Trap?

CoreWeave is certainly much cheaper as compared to its highpoint. However, cheaper does not exactly mean low-priced. The lack of profit is still a big red flag, mainly for a company that is operating right where it should be in the most favorable demand environment ever.

If the conditions are to turn less favorable, the pressure on CoreWeave’s finances would absolutely escalate rapidly. With AI-related stocks not hard to find, investors might think that they do not need to take this level of risk.

Safer AI Bets

Looking at the overall picture, CoreWeave’s market cap is small compared to Nvidia, but it still carries significant risk when considering its earnings. On the other hand, Nvidia and other established tech titans provide investors the AI experience with much stronger financial positions and proven profitability.

Many investors prefer this kind of trading over the one that requires betting on a firm that is still trying to convert explosive demand into sustainable profits.

Bottom Line

The decline in CoreWeave’s share price has lessened the enthusiasm surrounding what was once one of the hottest AI stories on the market, but it has not eliminated the risks that were already incorporated into the business. The company’s financial structure leaves little room for error despite the demand being strong, along with a real long term opportunity.

At this stage, CoreWeave seems more of a risky and a high-reward kind of bet. In a market that is flooded with AI options, investors might find it more sensible to stay on the sidelines until the figures become more appealing.