Investors may wonder what to make of CoreWeave (CRWV 2.56%). After a post-IPO run-up, the stock sells at nearly a 60% discount to its high from June. Despite the popularity of its artificial intelligence (AI) cloud and the triple-digit revenue growth that comes with that, investors soured on the stock amid financial challenges.
Nonetheless, despite this sell-off, investors may have a screaming buy on their hands, and here's why.
Image source: Getty Images.
Understanding CoreWeave
At first, one might wonder how CoreWeave can compete with Amazon's AWS or the Microsoft platform Azure. However, CoreWeave's cloud ecosystem stands out because the company specially designed it to handle AI-specific workloads. CoreWeave's data centers also run on Nvidia chips, giving customers an added reason to choose it over more established players.
So popular is this platform that it generated close to $3.6 billion in revenue in the first nine months of 2025, a 204% increase from the same period one year ago.
NASDAQ: CRWV
Key Data Points
Why the stock may have struggled
Unfortunately for shareholders, keeping up with that massive increase in demand has come at a cost. In the first three quarters of 2025, operating expenses grew by 267% yearly, outpacing the increase in revenue.
Additionally, CoreWeave had to borrow heavily to serve more customers, and that led to $841 million in interest expenses. In comparison, the company spent $212 million during the same period in 2024. Amid those challenges, CoreWeave lost $715 million in the first nine months of 2025, only a slight improvement from the $812 million loss in the same year-ago period.
This led to a negative free cash flow of $4.8 billion. On the surface, that seems concerning, given its $14 billion in debt, most of which is at interest rates ranging from 9% to 15%.
CoreWeave's path to recovery and growth
Technically, that debt rose further with the recent issuance of $2.25 billion in convertible notes. Nonetheless, those notes carry an interest rate of just 1.75%. Also, noteholders could convert those notes to shares at specific stock prices through 2031, giving CoreWeave a way to finance its massive capital expenditure, which was over $6.2 billion in the first nine months of 2025.
Moreover, analysts forecast 134% revenue growth for 2026. Such growth should bring it closer to profitability and may give CoreWeave the ability to finance existing debt at lower interest rates.
Amid the selling and uncertainty, CoreWeave sells at a price-to-sales (P/S) ratio of less than 8. Considering that many AI stocks sell at much higher multiples, now may be a good opportunity to buy the stock while it is still cheap.
CoreWeave is a buy
Admittedly, CoreWeave's ongoing losses, negative free cash flow, and massive debt pose risks to the company. However, it is likely also a screaming buy despite these factors.
The company has carved out a lucrative competitive advantage by offering an AI-specific cloud. The triple-digit revenue growth is evidence of this popularity and indicates it could eventually turn profitable. When you also consider its relatively low P/S ratio, CoreWeave looks increasingly like a screaming buy.
