Demand for cutting-edge chips has been through the roof, which helped propel the valuation of many companies involved in artificial intelligence (AI) to sky-high levels. Rather than chase Nvidia and other stocks that have already achieved significant gains, investors have been pivoting to other stocks, which may have more room to run.
One of those stocks with room to run is CoreWeave (CRWV 1.84%), which rents out computing capabilities to companies, giving them access to Nvidia's latest chips. When its shares went public in 2025, it quickly surged in value, becoming one of the hottest new AI stocks to own. With incredible sales numbers and growth opportunities related to AI, it seemed like a no-brainer buy for growth investors.
However, over the past six months, it's been a far different story for CoreWeave, as the stock has lost around 30% of its value during that time. It's also down more than 50% from its 52-week high of $187. Could now be a great time to buy the stock, or is more decline coming?
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CoreWeave's business has been red hot
CoreWeave experienced a slowdown in its growth rate in recent quarters, but it's hard not to have expected that, given just how incredibly strong it had been last year. Its latest results are still impressive, however, with the company more than doubling its revenue.
Data by YCharts.
Back in November, when it released its latest quarterly results (for the period that ended in September), the tech company said that its revenue backlog nearly doubled to over $55 billion, highlighting the strong demand the business is seeing. It benefited from strong demand from hyperscalers, including Meta Platforms, with which it recently entered into a multi-year deal worth more than $14 billion to help the social media company manage its AI workloads.
The AI-powered demand resulted in phenomenal growth for CoreWeave. But investors may have still been taking a second look at the stock, given its inflated valuation.
The stock's problem may have simply been its price
Although CoreWeave has been an exciting growth stock to invest in, it has also been a very expensive one to buy, with its market cap at one point reaching $88 billion.
And while it achieved some terrific top-line growth, its bottom line remains firmly in the red. During the first nine months of 2025, the company incurred net losses totaling $715.3 million. That's an improvement from $812.1 million in losses over the same period in the previous year, but it still paints a troubling picture overall for the company.
CoreWeave reported $841.4 million in net interest expense during the past three quarters, which is more than 19 times its operating profit of just $43.6 million over that time frame. Its business is capital-intensive, and that's making it difficult for it to demonstrate any kind of path to profitability. In light of this and the stock's rally out of the gate last year, investors have thought twice about the stock, with many opting to sell it and cash out some gains along the way.
NASDAQ: CRWV
Key Data Points
Is CoreWeave a good stock to buy today?
CoreWeave's stock is certainly a lot cheaper than it was at its peak, but investors shouldn't ignore its lack of profitability. That is a huge red flag for a business that should be thriving right now, amid a flurry of AI demand. The company could do even worse under less favorable conditions in the market.
With so many AI stocks out there to choose from, investors don't need to take on the risk that comes with CoreWeave, as its valuation could still go lower. Although its market cap of $45 billion is just a tiny fraction of Nvidia's valuation, it's still a safer bet to go with the top chipmaker or another big tech stock than to take on a lot more risk with CoreWeave.
