CoreWeave Stock Is Sinking Today -- Here's What Investors Need To Know

Shares of CoreWeave (NASDAQ: CRWV) are falling on Thursday, down 16.2% as of 2:13 p.m. ET. The large drop comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell by 0.3% and 0.1%, respectively.

CoreWeave stock's sharp drop isn't really being driven by specific news from today; rather, it's a retreat from the stock's recent massive run-up. The stock was up nearly 50% this week before today's fall after the company announced several catalysts.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

CoreWeave inks a key deal

CoreWeave, which provides cloud computing services to artificial intelligence (AI) companies like Nvidia and Microsoft, announced earlier this week that it has entered into a deal with Applied Digital to lease 250 megawatts of computing power for the next 15 years. The deal greatly expands CoreWeave's total capacity and ability to serve its customers.

CoreWeave appoints a new executive

On Wednesday, the company announced it has appointed Ernie Rogers as chief architect of strategic financing. Rogers will help CoreWeave continue to finance its rapid expansion. Michael Intrator, co-founder and CEO, explained in a statement that his "deep understanding of our business makes him uniquely qualified to help drive our next phase of growth."

There are reasons to be cautious

Image source: Getty Images.

CoreWeave's growth has been impressive, but I'm not sold on the stock. The company is highly leveraged and, with the recent appointment of Rogers, appears to be looking to add to this debt. This makes the company highly vulnerable to any disruptions in its growth.

This would already be cause for concern, but considering that CoreWeave's revenue is entirely dependent on just a handful of companies, the risk is greater. After all, its largest client, Microsoft, is a cloud provider itself. It's more than possible that CoreWeave sees a major disruption in sales that could handicap the company as it grows. Therefore, I would avoid CoreWeave stock.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.