Plummeted ~12%: CoreWeave—bought at the bottom by Duan Yongping—is turning into a battlefield for bulls and bears.
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Plummeted ~12%: CoreWeave—bought at the bottom by Duan Yongping—is turning into a battlefield for bulls and bears.
CoreWeave is one of the most polarizing AI assets in the U.S. stock market today.
Navigating Web3 tides with focused insightsAuthor: TechFlow
On May 8, AI cloud computing infrastructure provider CoreWeave (CRWV) plunged 11.4% in a single day, closing at $114.15. This marks another “earnings-day drop” since the company’s IPO in March last year. Yet this decline carries a sharper irony than previous ones: David Gan, widely known in Chinese-speaking circles as a protégé of Warren Buffett, initiated his first position in CoreWeave in Q4 2025—approximately $20 million—placing his entry near CoreWeave’s annual low range in December 2025, based on the average Q4 price and position size.
CoreWeave is currently one of the most polarizing AI assets in the U.S. equity market. On one side lies a nearly $100 billion order backlog and the compelling “picks-and-shovels” narrative of deep integration with NVIDIA; on the other, a financial reality where scaling up has widened losses—and persistent insider selling. The Q1 earnings report acted like a prism, refracting this divergence with exceptional clarity.
Q1 Earnings: Revenue Doubles but Losses Widen; Q2 Guidance Pierces Valuation
CoreWeave reported Q1 revenue of $2.08 billion, up 112% year-on-year and 32% quarter-on-quarter—exceeding LSEG’s consensus estimate of $1.97 billion. However, adjusted EPS loss stood at $1.12, worse than the expected loss of $0.90; net loss ballooned to $740 million, more than double the $315 million loss in the same period last year.
What truly triggered the sell-off was forward guidance. The company projected Q2 revenue between $2.45 billion and $2.6 billion, with a midpoint of $2.53 billion—well below the market expectation of $2.69 billion. Meanwhile, the lower end of its full-year 2026 capital expenditure forecast was raised from $30 billion to $31 billion, with CFO Nitin Agrawal attributing the increase to rising component prices.
The fragility of its profit structure was laid bare. Adjusted EBITDA reached $1.16 billion (56% margin), appearing robust—but adjusted operating profit was only $21 million, compressing operating margin to just 1%. The reason? Technology and infrastructure costs surged 127% year-on-year to $1.27 billion, while sales and marketing expenses skyrocketed over sixfold to $69 million. Revenues rose—but costs rose faster.
CEO Michael Intrator emphasized on the earnings call: “We have achieved hyperscale.” He disclosed that CoreWeave now counts 10 customers each committed to spending over $1 billion—significantly improving concentration risk compared to the 62% of 2024 revenue derived from Microsoft alone. Intrator also projected that CoreWeave’s annualized revenue will exceed $30 billion by the end of 2027.
Bull Narrative: $100 Billion Order Backlog and Deep NVIDIA Integration
The cornerstone of the bull thesis is the order backlog. As of the end of Q1, CoreWeave’s remaining performance obligations (RPO) totaled $99.4 billion—up ~$33 billion sequentially and nearly quadrupling year-on-year. Intrator stated that new contracts signed in Q1 alone exceeded $40 billion.
The customer roster is also reshaping market perception. Anthropic joined as a new client in Q1, receiving compute support for its Claude series models; Meta signed a $2.1 billion AI cloud agreement; trading firm Jane Street committed to ~$6 billion in orders and separately completed a $1 billion equity investment. NVIDIA purchased an additional $2 billion in Class A common stock this quarter—the world’s largest GPU supplier serving simultaneously as CoreWeave’s investor, key customer, and strategic partner, earning CoreWeave the moniker “NVIDIA’s own son.”
In terms of financing structure, CoreWeave secured an $8.5 billion investment-grade HPC (high-performance computing) guaranteed delayed-draw term loan (DDTL) in Q1, priced below 6%, which management called “a first-of-its-kind.” Year-to-date, the company has raised over $20 billion in debt and equity financing, with its weighted-average cost of debt falling approximately 80 basis points. S&P Global Ratings concurrently upgraded CoreWeave’s credit outlook from “Stable” to “Positive.”
Bear Logic: Bigger Scale, Lower Profitability; Debt Snowball Accelerating
Yet another set of numbers in the earnings report fuels anxiety. Q1 capex totaled $6.8 billion, and the company expects Q2 capex to climb further—to $7–9 billion. Its Q2 interest expense guidance ranges from $650 million to $730 million—reflecting rapid debt expansion.
Total debt has already reached staggering levels. As of Q1-end, CoreWeave’s total debt stood at ~$25 billion—a leverage ratio significantly higher than traditional cloud providers relative to its current annualized revenue scale. According to Morgan Stanley, CoreWeave’s debt financing volume for all of 2025 reached ~$11.8 billion—far exceeding its ~$1.5 billion in equity financing during the same period. DDTL—using signed contracts as collateral to borrow from banks for GPU procurement (“sign first, finance later”)—is the company’s core growth engine.
The sharpest criticism targets profit quality. Though management repeatedly highlights a 56% EBITDA margin, adjusted operating margin stands at just 1%, and the “true” gross margin—after deducting technology and infrastructure costs—is roughly 4%, down both sequentially and versus market expectations. Intrator attributed this to transitional effects of scale-up: as the company rapidly expanded from a 1-gigawatt operational footprint, newly added capacity significantly diluted margins. He pledged this represents the “low point” for margins, with gradual improvement expected in coming quarters.
But markets are not currently pricing in that promise. While analysts from Morgan Stanley and Jefferies issued positive assessments, CoreWeave has seen short-term pullbacks following every prior earnings release—and this time’s decline is the deepest yet.
Insider Selling Continues—Mirroring David Gan’s Contrarian Entry
Insider selling accelerated around the earnings release. CEO Mike Intrator sold 307,693 shares at the end of April; co-founders Brian Venturo and Chen Goldberg also recorded share sales; institutional shareholder Magnetar Financial had previously offloaded over $300 million. Most recently, a major shareholder disclosed another sale of ~1.2 million shares.
This stands in stark contrast to David Gan’s Q4 positioning. According to H&H International Investment’s 13F filing disclosed in February 2026, Gan initiated a first position in CoreWeave in Q4 2025—299,900 shares—when the stock had retreated over 65% from its peak and market concerns about its debt structure were peaking.
Notably, CoreWeave accounts for only 0.12% of Gan’s total H&H portfolio—effectively a “light, exploratory position.” In the same quarter, Gan increased his NVIDIA stake by over 1,110%, and initiated new positions in Credo Technology (high-speed interconnect) and Tempus AI (AI-powered healthcare)—with these three AI-related positions collectively representing less than 0.3% of his holdings. This implies Gan’s real bet is on NVIDIA itself; CoreWeave serves more as a small, downstream extension into the AI compute value chain.
The Critical Question Now: Inflection Point or Trap?
Intrator posed a pointed rhetorical question during the earnings call Q&A: “I’ve always felt everyone is fixated on this one tree—the stock price—while missing the entire forest.”
This line perfectly encapsulates the current bull-bear standoff. Bulls see the forest: a near-$100 billion contract backlog, diversified customer base, triple-layered ties with NVIDIA, and an upgraded credit rating. Bears see the tree: 1% operating margin, widening net losses, aggressive capex, and relentless insider selling.
CoreWeave’s stock remains up nearly 80% year-to-date and over 200% since its IPO. But when bulls base their case on long-term narratives and bears on current financials, every earnings report becomes a battleground for these two competing storylines. Gan remarked in a prior interview with Fang Sanwen: “AI is a massive revolution driven by a qualitative leap in computing power—its impact may surpass both the internet and industrial revolutions. Today’s AI bubble is obvious; perhaps 90% of companies will be eliminated, but survivors will become the next generation of giants.” His 0.12% position itself acknowledges the high uncertainty inherent in this wager.
The next critical test is already clear: the Q2 earnings report. If operating margin fails to rebound as management promised, the credibility of the “forest” narrative will face genuine stress testing.
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