CoreWeave Stock: Beware of the Threat Lurking

Rapid growth will get investors excited for a stock, and CoreWeave (NASDAQ: CRWV) delivers growth in spades.

The neocloud infrastructure company builds specialized artificial intelligence (AI) data centers and then sells the computing power. As AI investments continue, CoreWeave could deliver eye-popping revenue over the next 24 months. Growth can often craft a compelling investment narrative, but there's more to the story here.

Here is one red flag to consider before buying CoreWeave stock. It's a big enough deal that it may change your mind altogether.

Image source: The Motley Fool.

The jaw-dropping growth estimates are tempting

CoreWeave tells one of the most exciting growth stories in recent history. The company generated just $223 million in revenue in 2023. Only two years later, sales swelled to $5.1 billion in 2025, and that could be just the beginning. Wall Street estimates call for annual revenue of $12.45 billion this year, and $23.14 billion next year.

Data by YCharts.

Those growth estimates reflect blockbuster deals CoreWeave has signed with leading AI hyperscalers, including OpenAI, Meta Platforms, and Microsoft. These companies are building their own data centers while incorporating CoreWeave compute to scale their capabilities faster amid rampant AI-driven demand. In all, CoreWeave had a revenue backlog of $66.8 billion at the end of 2025.

CoreWeave depends on just a few hyperscalers for much of its revenue. But these companies continue to push further into an AI arms race that could see spending hit $700 billion this year alone. Therefore, CoreWeave's revenue trajectory actually looks quite solid.

A surging debt load looms large

The biggest problem for CoreWeave is that cutting-edge data centers are very expensive, and the company doesn't have an existing business to help fund them. Therefore, CoreWeave must put up a tremendous amount of capital up front to build the capacity to fulfill its commitments.

CoreWeave has quickly racked up over $29 billion in long-term debt while also issuing stock to raise additional funds. The share count is up approximately 13% since CoreWeave's IPO a year ago.

Data by YCharts.

The company is still burning through cash quickly, with free cash flow at minus $7.25 billion over the past four quarters. CoreWeave will likely continue to burn cash for as long as it's expanding, and its massive backlog means that may not happen for a while. That doesn't even address the issues if business eventually slows, and CoreWeave can't utilize all that capacity.

The debt could become an anchor around CoreWeave's neck. At the very least, it will generate interest expenses that drag on profitability for the foreseeable future. Management may lean more on issuing stock to raise capital in the future. Unfortunately for investors, the more stock CoreWeave issues, the more it dilutes shareholders.

Someone could look at CoreWeave's explosive growth and assume that it can grow its way out of any troubles. However, such assumptions wouldn't be wise. The risks in CoreWeave's stock are escalating with the debt load, and investors should think carefully before buying shares.

Justin Pope has positions in Meta Platforms and Microsoft. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool has a disclosure policy.