Quick Read
- CoreWeave shares have fallen over 60% from their June 2025 high, closing below $70 amid market concerns.
- Heavy debt, construction delays, and reliance on key customers like OpenAI have fueled investor skepticism.
- CoreWeave’s Q3 2025 interest expense hit $310.56 million; capex for 2025 is projected at $12–$14 billion.
- The collapse of its proposed Core Scientific merger and delays in revenue recognition have shaken confidence.
- Analysts remain divided, with price targets far above current levels but risk factors intensifying.
CoreWeave’s Stock Slide Signals Trouble in AI Infrastructure
Just months ago, CoreWeave, Inc. (Nasdaq: CRWV) was at the heart of Wall Street’s AI excitement, celebrated as a rising star in the “AI hyperscaler” world. Now, its shares have fallen more than 60% from their June 2025 peak of around $187, closing below $70 for the first time since May. This isn’t just a blip—it’s a reckoning for a sector once thought untouchable, as Reuters, Forbes, and CoinDesk have all reported.
Why the Collapse? Debt, Delays, and the End of Easy Money
CoreWeave’s business model is built around renting out GPU-accelerated cloud infrastructure to AI labs and enterprises—an appealing pitch in a world hungry for machine learning power. The company signed eye-popping multi-year deals with Meta (up to $14.2 billion) and OpenAI (up to $22.4 billion total commitments), and partnered with Nvidia to help hedge against unused capacity. These “anchor customers” are the backbone of the growth story, and at first glance, the numbers look impressive: Q3 2025 revenue hit $1.3647 billion, with an adjusted EBITDA margin above 60%.
But beneath the surface, cracks have appeared. CoreWeave’s rapid expansion has come at a steep price—literally. Net interest expense for Q3 alone reached $310.56 million, and the company expects to spend $1.21–$1.25 billion on interest in 2025. Capital expenditures are projected at $12–$14 billion for the year, a figure that has investors and analysts questioning how sustainable this growth really is.
Recent headlines have zeroed in on these concerns. The Wall Street Journal and MarketWatch noted that short sellers like Jim Chanos have targeted CoreWeave, arguing that the economics of AI data centers are fragile—capital-intensive, vulnerable to rapid hardware obsolescence, and exposed to rising financing costs. Construction delays, like heavy rainstorms in North Texas that pushed back major data center builds, have only heightened fears about execution risk. When CoreWeave revised its 2025 revenue forecast downward due to such delays, the market’s patience snapped. Investors don’t just want contracts—they want proof those contracts will translate into timely revenue.
Credit Crunch: Rising Debt and Dilution Fears
The financing story is central to CoreWeave’s current predicament. In December, the company upsized its convertible debt offering to $2.5875 billion, at a 1.75% interest rate, maturing in 2031. While convertibles can be cheaper than traditional debt, they come with the prospect of future share dilution, which the market is now actively pricing in. With interest costs soaring and capital markets tightening, investors have turned defensive. The cost of insuring CoreWeave’s debt against default (measured via credit default swaps) has spiked—recently hitting 7.9 percentage points, according to Forbes. CDS trading volume has surged, a clear signal that bondholders are bracing for potential trouble.
This atmosphere isn’t unique to CoreWeave. Oracle and Broadcom have also reported slower AI spending and faced sharp declines, as the entire “AI infrastructure” trade cools. Bitcoin miners who pivoted to high-performance computing, like IREN and Cipher Mining, enjoyed early gains but have since seen their stocks fall by half. The boom is morphing into a test of survival, where only those with disciplined capex and robust balance sheets are likely to thrive.
Customer Concentration: The OpenAI Wildcard
Another major risk flagged by analysts and investors is CoreWeave’s reliance on a handful of massive customers—especially OpenAI. As Forbes reports, OpenAI is burning billions in cash annually. If OpenAI fails to secure fresh funding, the repercussions could be severe: under the most pessimistic scenario, CoreWeave could lose up to 60% of its revenue, triggering a bankruptcy cascade that would ripple through Oracle, Microsoft, and the wider ecosystem.
For now, the company insists its contracts remain intact and that delays are temporary. Yet, the failure of CoreWeave’s proposed $9 billion merger with Core Scientific—a bitcoin miner turned data center landlord—underscores the difficulty of vertical integration and the market’s skittishness about taking on more risk. Core Scientific’s shareholders balked at the deal, fearing exposure to CoreWeave’s volatile stock and debt-fueled growth strategy.
Analyst Outlook: Volatility and Uncertainty Reign
Despite the turbulence, analyst sentiment hasn’t turned uniformly bearish. TipRanks and MarketBeat list CoreWeave as a “Moderate Buy,” with price targets in the low $130s—almost double the current share price. But the spread in forecasts is wide, reflecting genuine uncertainty about the durability of margins and the cost of capital. JPMorgan recently downgraded the stock, citing concerns over delays and execution, while Morgan Stanley nudged its target higher but remained cautious.
The bull case is simple: if CoreWeave can overcome delays, stabilize its debt load, and deliver on its massive backlog, the shares could rebound sharply. The bear case warns that the economics of AI infrastructure are unforgiving—high credit risk, intense capital needs, and the ever-present threat of hardware obsolescence. In this landscape, being a middleman is a tough business.
What’s Next for CoreWeave?
Investors will be watching several key indicators heading into 2026:
- Recovery from deployment delays: Can CoreWeave turn its backlog into real, timely revenue?
- Capex discipline: Will management rein in spending or double down for growth?
- Interest expense trajectory: Is the cost of capital stabilizing or rising?
- Quality of customer contracts: Are anchor deals with Meta and OpenAI truly “financeable,” or do they carry hidden risks?
- Convertible debt dynamics: How will future dilution play out as notes approach conversion?
For now, CoreWeave remains a poster child for the boom and potential bust of the AI infrastructure era. Its growth story is real, but so are the mounting challenges of financing, execution, and proving sustainable profitability in a fiercely competitive, capital-hungry sector.
CoreWeave’s trajectory in 2025 is a vivid illustration of how the AI infrastructure gold rush has collided with the hard realities of debt markets, operational risk, and investor skepticism. The company still has outsized potential, but unless it can navigate credit constraints and deliver on its promises, the lesson for the market may be that vision alone won’t pay the bills.