Why CoreWeave Stock Plummeted This Week
Key Points
CoreWeave stock fell amid mounting concerns that AI valuations had become overheated.
News hit that Michael Burry's hedge fund had placed bets against two of the market's hottest AI stocks.
New macroeconomic data made investors more cautious.
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CoreWeave (NASDAQ: CRWV) stock saw a significant pullback over the last week of trading. The company's share price fell 22.2% in a stretch of trading that played host to a 1.6% decline for the S&P 500 and a 3% decline for the Nasdaq Composite.
CoreWeave slid this week as investors became more cautious about valuation multiples applied to artificial intelligence (AI) stocks and reacted to some negative macroeconomic indicators. Despite the big pullback, the stock is still up 160% in 2025.
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CoreWeave stock fell in response to AI bubble concerns
Following comments made by some top analysts and investment banks last week, concerns that valuations for AI stocks may have become overly inflated intensified this week and translated to big sell-offs in the category. Bearish momentum in the AI space also picked up following news that Michael Burry, of The Big Short fame, had placed bets against Palantir and Nvidia through put options. The move by Burry's Scion Asset Management hedge fund helped prompt significant valuation pullbacks for Palantir and Nvidia, and the pricing trend extended to CoreWeave and other AI stocks.
Macroeconomic news also contributed to CoreWeave's slide
On Thursday, Challenger, Gray & Christmas published a report showing that October jobs cuts had come in at their highest level since 2003. Private U.S. employers laid off more than 153,000 workers in the month amid efficiency drives and the integration of AI technologies. The University of Michigan then published a report showing that its sentiment score measuring U.S. consumer confidence had dropped to its weakest level since 2022.
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Keith Noonan 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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