QUICK SPARK: CoreWeave Stock Hits New All-Time Low

CoreWeave (NASDAQ:CRWV) shares are sliding to a new all-time low amid a sharp selloff — the shares hit $49.92 and were down 8% on the day, extending the stock’s monthly losses to 44%.

In a Monday announcement, the company expanded its strategic partnership with CrowdStrike Holdings, Inc. (NASDAQ:CRWD) to enhance cybersecurity for AI workloads.

The collaboration integrates CrowdStrike’s Falcon platform to provide 24/7 managed security for CoreWeave’s AI cloud, according to Benzinga Pro.

Concerns Over Coreweave’s Financial Health

U.S. Treasury Secretary Scott Bessent addressed concerns about AI-related debt, describing neocloud companies like CoreWeave as a small component of the market.

Despite rising borrowing costs, Bessent noted that capital continues to flow into the tech sector, emphasizing that the financing for AI infrastructure remains robust. His comments come amid mounting financial pressure on CoreWeave.

In a Thursday note, concerns over capital spending by major tech companies affected neocloud stocks, including CoreWeave. Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) reported lower-than-expected capital expenditures, raising questions about the sustainability of hyperscaler spending. This led to a sharp decline in CoreWeave’s stock and other AI infrastructure providers.

AI Bubble Deflation and Coreweave’s Debt Concerns

In a Tuesday discussion, Ed Yardeni suggested that tighter credit conditions could deflate the AI bubble without causing a collapse. Yardeni highlighted that the bond market is scrutinizing AI investments more closely, which could restrain excessive spending. This scrutiny comes as CoreWeave faces increasing debt pressures.

CoreWeave’s credit default swaps have reached a record high, drawing comparisons to the 2008 Lehman Brothers collapse. The cost of insuring CoreWeave’s debt has surged, implying a significant default risk. This development has led some analysts to whisper ‘Lehman’ as they assess the company’s financial stability.

Technical Analysis

CoreWeave’s RSI stands at 33.72, indicating a neutral position. The stock trades 30.94% below its 50-day SMA of $79.45 and 39.93% below its 200-day SMA of $91.35. The 50-day SMA is also below the 200-day SMA.

Read also

• Jim Cramer Dares Nvidia’s Jensen Huang to Buy CoreWeave’s 15% Debt
• Trump’s $350 Billion Defense Gamble Has a $290 Billion Problem

Image: Shutterstock