Why Did CoreWeave Stock Soar 14.7% This Week?

Key Points

• CoreWeave announced its latest mega-deal.

• Meta Platforms will pay the company up to $14.2 billion for AI computing capacity.

• 10 stocks we like better than CoreWeave ›

Shares of CoreWeave (NASDAQ: CRWV) are soaring this week, up 14.7% as of market close on Thursday. The jump comes as the S&P 500 and the Nasdaq-100 were up 1.1% and 1.6%, respectively.

The artificial intelligence (AI) cloud provider announced on Tuesday that it has signed a major deal with Meta Platforms. The deal will be worth up to $14.2 billion and lasts roughly six years, ending Dec. 14, 2031. Meta does, however, have the option to "materially expand" its commitment through 2032 if it so chooses.

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CoreWeave shares are also getting a lift from Microsoft's chief technical officer (CTO), who told CNBC at a conference this week that regarding the lack of AI computing capacity, a "massive crunch is probably an understatement." Demand remaining white-hot is critical for CoreWeave's growth.

Image source: Getty Images.

Investors should remain cautious

The opportunity for CoreWeave and other AI infrastructure providers is enormous, but so are the risks. The company already carries a significant debt load and will continually have to borrow more at high rates or dilute its shareholders through stock sales for the foreseeable future. If AI demand lags -- and that is a real possibility that investors need to consider -- CoreWeave will be in serious trouble.

I would stay away from CoreWeave stock.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. 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.