Shares of AI infrastructure provider CoreWeave (CRWV) have been nearly cut in half from their recent peak. Now, all eyes are on partner and AI giant Nvidia’s upcoming earnings report, seen by many as a potential rescue mission for the plunging stock.
The sharp sell-off in CoreWeave shares didn’t happen in a vacuum. Growing concerns about a potential AI sector bubble have been compounded by a sobering warning from the company itself.
During a recent earnings call, CEO George Kurtz acknowledged that while demand from data center developers remains unabated, unprecedented pressure on the supply chain has directly impacted the business. A key client faced project delays due to these supply issues, which in turn delayed their payments to CoreWeave.
This delay forced the company to lower its Q4 guidance, revising its full-year revenue forecast down to $5.05-$5.15 billion from the previous $5.15-$5.35 billion. The announcement further rattled market confidence, intensifying the sell-off.
A potential turnaround, however, might be imminent. CoreWeave’s fate is deeply intertwined with Nvidia. The AI chipmaker is not only a key supplier but also holds a 7% equity stake in CoreWeave. A strong earnings report from Nvidia, particularly one showcasing robust ongoing AI infrastructure spending, could provide a powerful boost to CoreWeave’s prospects.
Industry signs suggest underlying demand remains strong. Recently, CoreWeave’s peer Iren Limited signed a five-year deal with Microsoft worth nearly $10 billion. Two months ago, Microsoft also secured a multi-billion dollar deal for AI compute with the Nebius Group. Earlier this month, CoreWeave itself announced a new partnership with security firm CrowdStrike.
CoreWeave’s own story is a tale of two sides, evident in its pivot from a cryptocurrency mining company to a specialized AI infrastructure provider. By massively procuring Nvidia’s H100 GPUs and using them as collateral for financing, it has explosively expanded its data center footprint from 3 to 33 in just a few years. The company’s revenue skyrocketed 738% in 2024 to $1.92 billion, with a massive $55 billion order backlog, underscoring potent market demand.
Yet, behind the impressive growth lurk significant risks: the company relies heavily on issuing new shares and taking on debt to fuel its expansion, resulting in a debt-to-equity ratio of 7.5. On a GAAP basis, CoreWeave isn’t expected to be profitable until at least 2027. More alarmingly, roughly 70% of its revenue depends on a single customer: Microsoft.
Tonight’s Nvidia earnings report has therefore become the last best hope for CoreWeave’s bulls. If Nvidia delivers an optimistic outlook, confirming that the AI infrastructure build-out is far from over, the battered data center stock could potentially stage a dramatic recovery, reminiscent of its parabolic rise earlier this year.
However, even a stellar report from Nvidia offers only a temporary reprieve. Investors must remain clear-eyed: CoreWeave’s own structural risks—high leverage, persistent losses, and extreme customer concentration—will not vanish overnight. Tonight, Nvidia isn’t just reporting to its own shareholders; its results are poised to dictate the near-term fate of a closely linked partner’s stock.
