CoreWeave Stock Crashes: What’s Behind the August 2025 Bloodbath?

Another day, another tech darling gets gutted by Wall Street's fickle appetite. CoreWeave shares are in freefall today—here's why the bulls are running for cover.

The GPU cloud provider got caught in the perfect storm of sector rotation and profit-taking after its AI-hype fueled rally earlier this year. When the music stops in tech, it's always the last ones holding the valuation bag that get crushed.

Market mechanics 101: What goes up must come down—especially when your P/E ratio starts resembling a phone number. The selloff accelerated after earnings whispers failed to match the street's cocaine-level optimism about AI infrastructure spend.

Bonus finance jab: Nothing brings out the 'long-term investors' like a 20% single-day drop. Diamond hands suddenly develop paper cuts when margin calls start rolling in.

CoreWeave's stock falls for the second day

The company beat analysts' estimates for revenue and earnings, with sales of $1.21 billion for the quarter coming in well above the $1.08 billion consensus target. CoreWeave also shrank its net loss and vastly improved its margins.

CEO Michael Intrator said the report "demonstrates continued momentum across every dimension of our business," and that his company is "scaling rapidly" amid "unprecedented demand for AI."

Still, investors saw reasons to be wary. The company's capital expenditures came in lower than expected for the quarter, and while less money moving out the door might sound like a good thing, as a company in hypergrowth mode, its capex is a good indicator of future revenue growth -- a sort of bellwether of demand.

Image source: Getty Images.

Other analysts pointed to the massive increase in its debt and the cost to service that debt. The company paid $267 million in interest this quarter, up significantly from the $67 million it paid a year before. D.A. Davidson analyst Gil Luria believes CoreWeave will take on a whopping $10 billion of additional debt by the end of the year.

This is a high-risk stock

CoreWeave is heavily Leveraged already and will continue to take on huge amounts of debt at steep interest rates in order to meet the "unprecedented demand" for AI. If that demand weakens, CoreWeave would be on the hook and could find itself in hot water.