CoreWeave Plummets 4.18%: Earnings, Debt, and Lockup Expiry Fuel Turbulence

Summary
• CoreWeave (CRWV) trades at $92.76, down 4.18% from its $96.80 previous close
• Q2 revenue surged 200% YoY to $1.21B, but quarterly loss widened to $0.27/share
• IPO lockup expiry triggered 40% sell-off, with 16.88M shares traded at $89.06
• Debt ballooned to $11B, with $2.9B capex spent on Nvidia GPUs
CoreWeave’s stock is in freefall as investors grapple with a mix of explosive growth and existential risks. A $30.1B backlog and AI-driven demand contrast sharply with $11B in debt and a 13x operating income interest burden. The IPO lockup expiry has unleashed selling pressure, while bearish short-seller Jim Chanos’ depreciation concerns and mixed analyst ratings amplify volatility.

Earnings Volatility, Debt Concerns, and Lockup Expiry Drive Sharp Decline
CoreWeave’s 4.18% intraday drop stems from a perfect storm of factors. The Q2 earnings report revealed a $0.27/share loss despite $1.21B revenue, exposing unsustainable debt-driven growth. With $11B in total debt and $2.9B in capex, the company’s reliance on high-interest loans for short-lived Nvidia chips raises red flags. The IPO lockup expiry last week unleashed 40% selling pressure, while Jim Chanos’ bearish argument—that GPU depreciation could erase profits—sparked panic. Analysts remain split, with 7 ‘Buy’ ratings vs. 2 ‘Sell’ ratings, but the $88.09 intraday low suggests capitulation.

Data Processing & Outsourced Services Sector Mixed as Microsoft Drives Weakness
The Data Processing & Outsourced Services sector faces headwinds as Microsoft (MSFT), its leader, declines 1.27% intraday. CoreWeave’s sharp drop mirrors broader sector jitters, though its debt-laden model diverges from Microsoft’s cloud dominance. While Microsoft’s AI infrastructure investments remain stable, CoreWeave’s $11B debt load and short-lived assets make it a high-risk outlier. The sector’s focus on scalable, long-term infrastructure contrasts with CoreWeave’s speculative AI chip leasing strategy.

Bearish Technicals and High-Leverage Puts Signal Short-Side Opportunity
• RSI: 45.33 (oversold)
• MACD: -6.25 (bearish), Signal Line: -4.98
• Bollinger Bands: Lower bound at $88.10 (current price near support)
• 30D MA: $122.59 (price 24% below)
CoreWeave’s technicals scream caution. The RSI at 45.33 suggests oversold conditions, but the MACD’s -6.25 and Bollinger Bands’ $88.10 lower bound indicate a potential breakdown. Two high-leverage puts stand out: CRWV20250829P88 and CRWV20250829P90.

CRWV20250829P88 (Put, $88 strike, 8/29 expiry):
• IV: 87.02% (high volatility)
• Leverage: 27.55% (high)
• Delta: -0.33 (moderate sensitivity)
• Theta: -0.099 (moderate time decay)
• Gamma: 0.0256 (moderate price sensitivity)
• Turnover: 866,131 (liquid)
This contract offers 25.52% price change potential if CoreWeave breaks below $88. A 5% downside to $88.10 would yield a $0.90 payoff (max $0.90 per share).

CRWV20250829P90 (Put, $90 strike, 8/29 expiry):
• IV: 82.22% (high)
• Leverage: 24.12% (high)
• Delta: -0.38 (moderate sensitivity)
• Theta: -0.074 (moderate decay)
• Gamma: 0.0288 (strong price sensitivity)
• Turnover: 3,952,593 (extremely liquid)
This contract’s 26.73% price change potential and 3,952,593 turnover make it a top pick. A 5% drop to $88.10 would generate a $1.90 payoff (max $1.90 per share).

Aggressive bears should target CRWV20250829P90 for a short-term breakdown trade. If $88.10 breaks, the $90 put offers a 1.90x payoff on a 5% move.

Backtest CoreWeave Stock Performance
The backtest of CRWV's performance after an intraday plunge of -4% shows favorable results. The 3-Day win rate is 57.50%, the 10-Day win rate is 62.50%, and the 30-Day win rate is 47.50%. Additionally, the maximum return during the backtest period was 40.25%, which occurred on day 39. These statistics indicate that CRWV tends to recover from significant intraday declines and suggests a potential for positive returns in the short to medium term.

CoreWeave at Crossroads: Watch $88.10 Support and Microsoft’s Lead
CoreWeave’s $88.10 support level and Microsoft’s -1.27% decline are critical near-term signals. The stock’s debt-driven model and short-lived assets make it a high-risk bet, but technicals and options liquidity suggest a bearish bias. Investors should monitor the $88.10 breakdown and Microsoft’s cloud infrastructure moves. Aggressive short-sellers may target CRWV20250829P90 for a 1.90x payoff if the $88.10 level fails. For now, CoreWeave’s volatility is a double-edged sword—opportunity for the bold, peril for the unwary.