The AI Bull Market Has Hit a Speed Bump. Should You Buy CoreWeave on the Pullback?
Key Points
CoreWeave has a backlog of more than $66 billion.
For 2026, management expects revenue of between $12 billion and $13 billion.
The stock pulled back sharply around the end of February, dropping by 24% in a matter of days.
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Following its March 2025 initial public offering (IPO), cloud computing company CoreWeave (NASDAQ: CRWV) rode the wave of artificial intelligence (AI) enthusiasm to early success. From its initial price of $40 per share, the stock rose to a peak of $187 roughly three months later.
Then came a steep correction in the summer of 2025 after the lockup period ended (allowing company insiders and the IPO's underwriters to sell their shares), losses mounted, and a wave of worry swept Wall Street that AI infrastructure spending might not deliver the promised returns on investment.
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Recently, CoreWeave stock took another steep dive, dropping by a double-digit percentage in a matter of days.
Shares are now under $75 -- but is this a buying opportunity, or are more speed bumps and downward pressure ahead?
The bull case
CoreWeave offers storage, networking, and computing for companies looking to train and deploy AI models.
Revenue has been rolling in at an accelerating pace. The company reported roughly $1.6 billion in sales in the fourth quarter, a 110% increase from the prior-year period. For the year, total revenue rose 168% to $5.1 billion.
Sales growth is expected to be strong for 2026 as well. Management is guiding for revenue of $12 billion to $13 billion, which would amount to approximately 144% growth at the midpoint.
There are also signs of steady demand for its cloud offerings, with a revenue backlog of $66.8 billion.
Add in a large dose of caution
Competing in the AI infrastructure race isn't cheap, especially for those companies that must borrow money to build their data centers. As an example, CoreWeave's interest expense more than doubled year over year in Q4 2025 to $388 million. Meanwhile, its capital expenditures are expected to approximately double in 2026 to between $30 billion to $35 billion.
The capital-intensive nature of its business leaves CoreWeave even more vulnerable to waves of concern around AI infrastructure spending and other AI-related jitters, which can easily whipsaw the stock price. For instance, on Feb. 25, CoreWeave opened at just under $101. On March 2, it opened at a little over $76. That was a 24% drop in just a few days.
How CoreWeave fits in a portfolio
CoreWeave stock is best suited for more aggressive investors who also believe the company will play a critical role in providing AI infrastructure for the long term. Those investors will want to keep a close watch on the pace at which it can turn its backlog into revenue, and whether it can eventually turn some of that revenue into profits.
It will also be important to monitor those interest expenses. As we've already seen during this company's limited trading history, its pullbacks can be quick and sharp. That's why CoreWeave should only occupy, at most, a small, speculative portion of any retail investor's portfolio.
Should you buy stock in CoreWeave right now?
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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