CoreWeave Dropped 20% Last Week. Is It Time to Panic or Buy?
Key Points
CoreWeave's debt load is about $35 billion, making investors increasingly nervous.
Even so, Nvidia CEO Jensen Huang publicly defended the neo-cloud company.
- 10 stocks we like better than CoreWeave ›
It was nothing short of a brutal week for CoreWeave (NASDAQ: CRWV). The AI cloud computing company's stock was crushed, falling more than 20% as of Oct. 16. The cause of the precipitous fall is mainly twofold: debt and spending worries. Is it time for CoreWeave's shareholders to panic, or is this an opportunity?
First, investor concerns regarding CoreWeave's debt load are real. The company has approximately $35 billion in total debt, compared to just $5.5 billion in cash. Net interest payments are racking up and hit $640 million in just the second quarter. The yields on CoreWeave's unsecured bonds are approaching 15%. S&P rates the company a B+, which is essentially junk bond territory.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The company's extraordinarily high capital expenditures this year are also cause for concern. CoreWeave spent just over $16 billion in the first half of 2026 and expects to spend up to $39 billion total this year. That's triple its revenue guidance of $12.4 billion to $13.2 billion.
Image source: The Motley Fool.
Lastly, there's growing public resistance to data centers. States are considering imposing restrictions and moratoria to curb development.
So, with all this bad news, are there still reasons to invest? Yes, and it has to do with demand and CoreWeave's backlog. In the second quarter alone, revenue grew 112% year over year, and the backlog exceeded $104 billion. Even Nvidia's (NASDAQ: NVDA) CEO Jensen Huang came to CoreWeave's defense, saying that he's optimistic about the stock even after this plunge.
Aa long-term investor, I have reservations about CoreWeave right now, as many others do. I think this price drop presents an opportunity, but only for the most risk-tolerant. If buying CoreWeave now, I'd likely build a position slowly over time. The company needs to prove it can convert its backlog efficiently and manage its debt load effectively.
Should you buy stock 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 $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 19, 2026.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
