CoreWeave Stock Explodes: The 5 Reasons Behind Last Week’s Meteoric Rally

Wall Street's latest rocket ship wasn't a meme stock—it was a GPU-powered freight train.

CoreWeave's shares blasted past analyst targets last week as three seismic shifts converged: Nvidia's earnings tsunami, a surprise cloud contract from Big Tech, and shorts getting vaporized in the options furnace.

The AI Infrastructure Gold Rush

When Nvidia printed $30B in data center revenue, the entire compute supply chain caught fire. CoreWeave's racks of H100s suddenly looked like Fort Knox.

Cloud Wars Get Nuclear

Amazon and Google's capex warnings created a power vacuum. Enter CoreWeave's nine-figure deal with a 'hyperscaler' (read: Microsoft) to host next-gen AI models.

Gamma Squeeze Fireworks

With 40% of float sold short, the stock became a powder keg. Friday's 12% surge triggered margin calls—because nothing fuels rallies like hedge funds buying shares they just swore were overvalued.

As the Street scrambles to upgrade price targets, skeptics whisper about 'GPU overcapacity' risks. But for now? The only thing hotter than CoreWeave's servers are the brokerages revising their 'Hold' ratings to 'Buy'—right after the 150% run-up.

Image source: Getty Images.

What's next for CoreWeave?

CoreWeave announced on July 7 that it had entered into an agreement to purchase Core Scientific at a $9 billion valuation. Even before the deal was officially announced, rumblings of a potential acquisition were met with negative reactions from CoreWeave shareholders. Some big Core Scientific shareholders are also apparently unhappy with the deal.

While terms for the potential buyout have already been agreed to, CORE Scientific's shareholders still need to approve the acquisition. Along with bullish valuation momentum for the broader AI space, hopes that the buyout could be scuttled helped power big gains for CoreWeave stock this week.

What's next for CoreWeave?

If CoreWeave were to complete its acquisition of Core Scientific, it WOULD help the company reduce roughly $10 billion in lease expenses. On the other hand, the all-stock deal would result in a substantial amount of share value dilution for current stockholders -- and some investors and analysts are wondering whether the buyout is in the company's best interest.

While news about the potential Core Scientific acquisition will probably continue to play a significant role in CoreWeave stock's near-term performance outlook, the AI cloud computing company has strengths that could allow it to deliver strong returns regardless of how the buyout situation resolves.