CRWV Stock Price Forecast: Musk Warns Neocloud Industry, Stock Risks Falling Below $50

TradingKey - As of the close on October 29 Eastern Time, CoreWeave (CRWV) shares extended their recent weakness, falling 4.99% on the day to close at $60.74, after hitting an intraday low of $60.11; in after-hours trading, the stock slipped further to around $57. Since late September, CoreWeave's stock price has steadily declined from above $80, at one point touching a year-to-date low of $51.24 on October 26.

Volatility in Neocloud-related stocks has increased significantly recently. Beyond the market's reassessment of AI infrastructure capital expenditure, Elon Musk's recent cautious comments on the Neocloud industry have also become one of the short-term focus factors for the sector.

Musk Warns Neocloud Industry May See Major Consolidation and Exits

Elon Musk recently stated that the Neocloud industry could see large-scale consolidation and corporate exits in the future, adding that SpaceX (SPCX) has no intention of acquiring Neocloud companies. He expects that among the currently large number of related companies, the number that can ultimately survive independently may be limited.

For companies in the Neocloud industry, substantial upfront capital is typically required to build data centers, procure GPUs, and expand power and network infrastructure, after which revenue is recognized through long-term computing power contracts. Consequently, while revenue grows rapidly, debt levels, interest expenses, and free cash flow also become crucial variables in valuation.

CoreWeave's second-quarter revenue reached $2.575 billion, up approximately 113% year-over-year. As of the end of June, the company's revenue backlog stood at around $104 billion, with more than $25 billion in new customer commitments added at the beginning of the third quarter, reflecting a remaining large volume of future contracted revenue.

On the other hand, the company remains in a net loss position. In the second quarter, CoreWeave recorded a net loss of $626 million, widening from $290 million in the same period last year, while net interest expense reached $640 million. During the same period, adjusted EBITDA was $1.51 billion, and the adjusted net loss was $567 million.

As of the end of the second quarter, CoreWeave's total debt stood at approximately $35.3 billion, with cash and cash equivalents of about $5.524 billion. As the company continues to construct AI data centers, future capital expenditures, financing costs, and the speed at which revenue translates into operating cash flow will remain key market focuses.

However, from the demand side, CoreWeave currently still holds a substantial volume of long-term orders. The company has long-term computing power agreements with major clients such as OpenAI and Meta (META), while Nvidia has also committed to purchasing a portion of the computing capacity unused by customers. This means that the focus of current market debate is not whether AI computing demand exists, but rather on whether a balance can be maintained among revenue growth, margin improvement, and capital structure.

CRWV Stock Price Technical Analysis

CRWV stock price weekly chart, Source: TradingView

Looking at the weekly chart of CRWV's stock price, the overall candlestick pattern forms a clear trend of lower highs and lower lows, indicating that the stock's medium-to-long-term trend remains bearish. Meanwhile, as multiple moving averages display a bearish alignment, it further underscores the strong persistence of this medium-to-long-term bearish trend.

Currently, with the stock price confirming a breakdown below the key support level of $70, further downside space has opened up, with the primary target testing $50–$48 on the downside. If the stock price breaks below $48, it may further retreat toward its historical low of $36.

Conversely, if the stock price shows signs of stabilizing above $48, it may see a short-term technical rebound. The primary upside target will be to test $64.39, and a breakthrough above this level would lead to a further test of the key resistance level at $70.