CoreWeave Plummets 18% on Earnings Shock: Lock-Up Expiry Looms as Volatility Catalyst

Summary
• CoreWeave (CRWV) drops 18% intraday to $122.0, erasing $26.8B in market cap
• Q2 loss widens to $0.60/share vs. $0.45 forecast; revenue triples to $1.21B
• Lock-up expiry Thursday triggers investor anxiety; $30.1B revenue backlog unveiled
• Options frenzy: 20 contracts trade with 112-123 strike prices, 44%-159% implied volatility

CoreWeave's 18% intraday freefall reflects a perfect storm of earnings underperformance and impending liquidity risks. The AI infrastructure provider's wider-than-expected Q2 loss, combined with a $9B all-stock acquisition of Core Scientific and Thursday's lock-up expiry, has triggered a liquidity-driven selloff. With 28M shares traded (10.2% turnover) and Bollinger Bands showing $94.71 support, the stock faces critical technical junctures as institutional selling pressure intensifies.

Wider-Than-Expected Loss and Lock-Up Expiry Trigger Sharp Selloff
CoreWeave's 18% intraday collapse stems from a combination of earnings underperformance and structural liquidity risks. The company reported a $0.60/share loss (vs. $0.45 forecast) despite tripling revenue to $1.21B, revealing $1.19B in operating expenses (up 276% YoY). Analysts highlighted the $30.1B revenue backlog as a long-term positive but criticized delayed capex spending and potential dilution from the $9B Core Scientific acquisition. Compounding concerns, Thursday's lock-up expiry will unlock 10.2% of shares held by insiders, creating immediate supply-side pressure. The stock's 52-week high of $187 now appears distant as short-term technical indicators (MACD -1.30, RSI 62.3) suggest continued downward momentum.

Software - Infrastructure Sector Mixed as Microsoft Drags Down CoreWeave
The Software - Infrastructure sector (S&P 500 weight: 27.96%) shows mixed performance with Microsoft (-1.02%) dragging down peers. CoreWeave's 18% drop outpaces the sector's 1.18% gain, reflecting its speculative nature and acquisition-related risks. While Microsoft's Azure division dominates AI infrastructure, CoreWeave's 207% YoY revenue growth (vs. Microsoft's 23% cloud growth) highlights its niche focus. However, CoreWeave's -46.5x P/E ratio and 387.6% debt-to-equity contrast sharply with Microsoft's 34x P/E and 1.2% debt-to-equity, underscoring divergent risk profiles.

Options and ETF Strategy Amid Volatility: Focus on Put Contracts and Short-Term Plays
• 30D MA: $129.88 (above current price) • RSI: 62.3 (neutral) • MACD: -1.30 (bearish) • Bollinger Bands: $94.71 (lower) • Implied Volatility: 44.3%-159% (extreme)

With CoreWeave trading near its 52-week low ($33.52) and Bollinger Bands indicating $94.71 as critical support, traders should focus on short-term put options. The options chain reveals two high-leverage contracts:

• CRWV20250822P120 (Put): Strike $120, Expiry 8/22, IV 145.3%, Leverage 12.04%, Delta -0.412, Theta -0.3138, Gamma 0.01318, Turnover 4.2M
• CRWV20250822P122 (Put): Strike $122, Expiry 8/22, IV 147.28%, Leverage 10.77%, Delta -0.4389, Theta -0.3099, Gamma 0.01317, Turnover 138K

Under a 5% downside scenario (target $115.9), CRWV20250822P120 would yield $4.10 profit (34% return), while CRWV20250822P122 would deliver $7.10 (59% return). These contracts benefit from high gamma (0.013+) and moderate delta (-0.41 to -0.44), offering optimal leverage for a 5-7% move. Aggressive bulls may consider CRWV20250822C115 (Call) if $119.3 support holds, but the put contracts better align with current technical indicators.

Backtest CoreWeave Stock Performance
The backtest of CRWV's performance after an intraday plunge of at least -18% shows favorable results. The 3-Day win rate is 64.71%, the 10-Day win rate is 61.76%, and the 30-Day win rate is 52.94%. Additionally, the maximum return during the backtest period was 49.56%, indicating that CRWV has the potential for recovery following a significant downturn.

Act Now: CoreWeave's Volatility Presents High-Risk, High-Reward Opportunities
CoreWeave's 18% selloff reflects near-term overreaction to earnings and liquidity risks, but the $30.1B revenue backlog and AI infrastructure tailwinds suggest volatility may be overdone. Traders should prioritize CRWV20250822P120 and CRWV20250822P122 for short-term bearish exposure, while monitoring the $119.3 intraday low and $121.10 30D MA. The sector leader Microsoft (-1.02%) highlights broader market caution, but CoreWeave's unique position in AI compute could drive a rebound if the lock-up expiry passes without panic selling. Position sizing should reflect the stock's 10.2% turnover and 16.74% intraday drop, with stops below $115.9 to protect against further downside.