CoreWeave Shows Strong Momentum Amid AI Boom, But Overvaluation and Losses Raise Cautions

Technical Analysis

CoreWeave (CRWV) closed at $102.74 on May 23, 2025, up 2.58% on strong volume (30.85 million vs. average 18.52 million), signaling robust trading interest and positive momentum. The RSI at 83 indicates an overbought condition, suggesting a potential near-term pullback or consolidation. The stock recently tested resistance at $107.39 but failed to break through decisively, while support holds firm at $100.16. The MACD remains strongly positive at 10.98, confirming recent upward momentum. Both the 50-day and 200-day moving averages currently sit at $54.84, well below the current price, reflecting a strong bullish trend over the medium to long term. The Average True Range (ATR) of $9.38 signals elevated volatility. A stop-loss near $98.22 could be advisable for active traders.

For the next trading day (May 27), the stock may experience slight profit-taking due to overbought RSI levels, with support near $100.16 likely to hold. Over the upcoming week, unless market sentiment shifts sharply, the strong momentum and institutional interest could push CRWV back toward the $107 resistance zone, with a breakout potentially driving further gains.

Fundamental Analysis

CoreWeave operates in the AI data center segment, a high-growth niche benefiting from the AI boom projected to add nearly $20 trillion to the global economy by 2030. Recent bullish sentiment is buoyed by noteworthy activity including a 200% stock rise over the past month and a 39% jump in just one week in late May, driven by strong customer acquisition and market positioning. Billionaire investor Philippe Laffont’s recent share accumulation signals notable confidence.

However, CoreWeave remains unprofitable with a trailing twelve-month EPS of -$2.53 and an extremely negative P/E ratio of -40.61, indicating sustained losses and a lack of earnings to underpin the current share price. The next earnings report on August 13, 2025, will be critical in assessing progress toward profitability or margin improvements.

Analyst consensus skews bullish with 5 buys and 3 holds, but target prices averaging $56.13 and medians at $53 imply significant downside potential from current levels, reflecting skepticism about valuation sustainability. This divergence between market momentum and analyst price targets hints at an overvaluation risk in the near term.

Intrinsic Value and Long-Term Potential

Intrinsic value estimations for CRWV would likely be tempered by its ongoing losses and absence of positive cash flow, despite its exposure to the AI data center sector poised for rapid growth. The premium valuation reflects high growth expectations priced in by investors. Long-term potential hinges on CoreWeave’s ability to convert top-line growth into profitability and sustain competitive advantages amid increasing capital expenditures in AI infrastructure.

If CoreWeave delivers strong earnings growth over the next 12 to 18 months, valuation could justify current levels and potentially expand. However, until consistent profitability is realized, intrinsic value remains uncertain and weighted toward downside risk. The company’s market cap of approximately $49.31 billion presumes aggressive growth execution in a highly competitive environment.

Overall Evaluation

CoreWeave exhibits strong technical momentum supported by a surging AI market narrative and institutional interest. Nonetheless, fundamental risks from persistent losses, overbought technical signals, and a significant gap between price and analyst target consensus suggest caution.

Classification: Hold

Rationale: The stock’s current price captures high growth optimism with strong short-term momentum yet carries considerable risk given negative earnings, valuation concerns, and potential near-term price correction due to overbought conditions. The upcoming earnings and ability to improve profitability will be pivotal for re-rating potential. Investors with a higher risk tolerance might maintain exposure, but the broader investor base should monitor price action and fundamental developments closely before adding new positions.