This Data Center Stock Could Go Parabolic Following Nvidia Earnings
Key Points
CoreWeave shares plunged when the company said supply chain issues are delaying one project.
The stock has been nearly cut in half in just the last month.
Revenue is soaring, but investors still have to be very cautious.
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The first thing investors need to know about CoreWeave (NASDAQ: CRWV) is that it's a very volatile stock. Assess your risk appetite before making a decision. That said, an upcoming catalyst might pay off for investors in the artificial intelligence (AI) cloud services hyperscaler.
Shares have been almost halved over the past month. That came as investors began talking about a bubble in AI stocks while the company also warned that it is being affected by supply chain pressures.
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However, deals continue to be announced in the sector, and the upcoming earnings report from AI leader Nvidia (NASDAQ: NVDA) could spark a sharp recovery in CoreWeave stock.
Image source: Getty Images.
AI investment jitters
To be clear, even if Nvidia allays fears of a slowdown in AI infrastructure spending, investors shouldn't expect CoreWeave stock just to reverse course and soar higher. However, continued follow-on announcements of data center construction projects could prompt CoreWeave stock to repeat its parabolic move experienced earlier this year.
Such deals continue to be announced, even as investors fear an AI spending bubble is forming. CoreWeave peer Iren Limited recently announced that it has signed a five-year agreement with Microsoft for graphics processing unit (GPU) cloud computing services, valued at nearly $10 billion.
That came about two months after Microsoft also agreed to a multibillion-dollar deal with Nebius Group for needed AI infrastructure capacity. Microsoft's needs are immediate. The deal with Nebius will dedicate data center compute capacity to Microsoft by the end of this year, utilizing Nebius' new data center in New Jersey.
CoreWeave also added a deal with CrowdStrike to utilize its data center capacity earlier this month. CrowdStrike CEO George Kurtz described that agreement this way:
AI is transforming security, and CrowdStrike is transforming how AI is secured. CoreWeave powers some of the most advanced AI workloads on the planet, and CrowdStrike secures where AI happens. Together, we're building a foundation for the agentic era, where security is inherent to AI itself.
A positive take on the industry from Nvidia could help drive CoreWeave stock higher in part because that partnership is built on Nvidia's AI infrastructure.
The warning that spooked Wall Street
CoreWeave stock wouldn't have necessarily moved on a strong Nvidia report, though, if it weren't for the recent tumble in the stock's value. The catalyst for the ongoing sell-off was comments made on CoreWeave's recent earnings call.
CEO Mike Intrator called the demand for its platform from data center developers "relentless." Significantly, though, he added that "unprecedented pressure across supply chains" is directly affecting its business. He noted that a data center developer is behind schedule due to supply chain issues, causing delays in payments to CoreWeave.
The delay will impact CoreWeave's fourth-quarter results, with full-year revenue now expected to come in between $5.05 billion and $5.15 billion. That was a decrease from the prior guidance range of $5.15 billion to $5.35 billion.
Expect a lot of volatility
Notably, the company stressed the impact should be temporary. Management said the customer has agreed to modify the delivery schedule to maintain their capacity for the entire duration and the total value of the initial agreement.
A bet on CoreWeave stock is essentially a bet that AI infrastructure investments will continue to grow. The market is closely monitoring what Nvidia has to say on that topic. With CoreWeave shares down since it warned of a delay with one customer's contract, overall news that the sector continues to spend on data center capacity could spark a sharp rebound for CoreWeave stock. Investors just need to be ready for a bumpy ride along the way.
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Howard Smith has positions in CrowdStrike, Microsoft, and Nvidia and has the following options: short February 2026 $170 calls on Nvidia. The Motley Fool has positions in and recommends CrowdStrike, 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.
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