CoreWeave (CRWV) Plunges 2.84% Amid AI Infrastructure Hype and Geopolitical Jitters: What’s Driving the Selloff?

Summary
• CoreWeave’s stock (CRWV) slumps to $121.51, down 2.84% intraday, amid mixed investor sentiment.
• A $14.2B Meta AI cloud deal and Serverless RL launch failed to offset rising costs and geopolitical risks.
• Options volatility surges, with 20 contracts trading above 60% implied volatility.

CoreWeave’s sharp intraday decline reflects a tug-of-war between bullish AI infrastructure momentum and bearish macro concerns. Despite a landmark Meta partnership and product innovation, rising capital expenditures, shareholder opposition to its Core Scientific acquisition, and Trump-era trade rhetoric have triggered a selloff. The stock’s 52-week range of $33.52–$187 underscores its volatility, while technical indicators signal a critical juncture for traders.

AI Breakthroughs vs. Capital Intensity and Geopolitical Noise
CoreWeave’s 2.84% drop stems from a collision of macroeconomic headwinds and operational pressures. While the Serverless RL platform and Meta’s $14.2B AI cloud deal validate its infrastructure leadership, the stock’s decline reflects investor skepticism over profitability. The company’s $2.9B Q2 capex and $20–23B annual spending plans highlight its capital-intensive model, raising questions about long-term margins. Meanwhile, Trump’s anti-China rhetoric and trade threats have spooked tech investors, amplifying risk-off sentiment. Analysts at Weiss Ratings reaffirmed a 'Sell' rating, citing valuation risks, while CoreWeave’s standoff with Core Scientific shareholders over its $9B acquisition adds execution uncertainty.

Bearish Setup: Put Options and Bollinger Band Breakdowns Signal Short-Side Opportunity
• MACD: 3.68 (Signal Line: 5.68, Histogram: -1.999) – Bearish divergence.
• RSI: 40.65 – Oversold territory but lacks immediate reversal signals.
• Bollinger Bands: 147.37 (Upper), 133.97 (Middle), 120.57 (Lower) – Price near lower band, suggesting potential bounce or continuation.
• 30D MA: 129.72 (Current Price: 121.51) – Below key support.

Technical indicators point to a short-term bearish bias. The RSI at 40.65 suggests oversold conditions, but without a clear reversal pattern, the stock remains vulnerable to further declines. The MACD histogram’s negative divergence and price proximity to the Bollinger lower band reinforce this view. For options traders, two contracts stand out:

• CRWV20251031P115 (Put, Strike: $115, Expiry: 2025-10-31):
- IV: 86.31% (High Volatility)
- Leverage Ratio: 23.69% (Moderate)
- Delta: -0.387 (Moderate Sensitivity)
- Theta: -0.1216 (Moderate Time Decay)
- Gamma: 0.0226 (Sensitivity to Price Movement)
- Turnover: 109,882 (High Liquidity)
- Payoff (5% Downside): $6.51 per contract. This put offers a balance of leverage and liquidity, ideal for a 5% downside scenario.

• CRWV20251031P119 (Put, Strike: $119, Expiry: 2025-10-31):
- IV: 71.73% (Moderate Volatility)
- Leverage Ratio: 20.36% (Moderate)
- Delta: -0.488 (High Sensitivity)
- Theta: -0.0273 (Low Time Decay)
- Gamma: 0.0283 (High Sensitivity to Price Movement)
- Turnover: 54,322 (High Liquidity)
- Payoff (5% Downside): $13.51 per contract. This put’s high gamma and moderate IV make it a strong candidate for a sharp move below $120.

If the stock breaks below $120.57 (Bollinger Lower Band), CRWV20251031P115 offers a high-probability short-side play. Aggressive bears may consider CRWV20251031P119 into a breakdown below $120.

Backtest CoreWeave Stock Performance
Here is the completed back-test together with a concise explanation of the methodology and the assumptions that were auto-filled. You can explore every metric and trade in the interactive module below.Key points & assumptions (not duplicated in the module):1. Event detection logic: every trading day whose intraday low falls ≥ 3 % below the previous close from 2022-01-01 through 2025-10-21. 2. Trade execution price: day-end close (close-to-close back-test). 3. Auto-filled risk controls: 10 % take-profit, 5 % stop-loss, maximum 5-day holding—typical short-term mean-reversion settings for this pattern. 4. The module will let you drill down into returns, drawdowns, win-loss distribution, and each individual trade chronology.Feel free to let me know if you’d like to tweak the trigger threshold, holding rules, or explore a different risk framework.

CRWV at a Crossroads: Watch $120.57 Support and Sector Leader AMZN’s Direction
CoreWeave’s selloff reflects a market recalibrating its AI infrastructure premium amid rising costs and geopolitical noise. While the Meta deal and Serverless RL validate its strategic position, profitability remains elusive. Traders should monitor the $120.57 Bollinger lower band and 30D MA at $129.72 for directional clues. A breakdown below $120.57 could trigger a test of the 52-week low at $33.52, while a rebound above $133.97 (Middle Band) may reignite bullish momentum. Sector leader Amazon (AMZN) is down 1.72%, signaling broader tech caution. Investors should prioritize liquidity and volatility metrics in options strategies, favoring puts like CRWV20251031P115 for a bearish bias. Watch for $120.57 breakdown or regulatory reaction.