CoreWeave Soars 19% to $107.39 Amid High Trading Volume but Faces Near-Term Pullback Risks

Technical Analysis

CoreWeave (CRWV) experienced a remarkable surge of 19.00% on May 21, closing at $107.39 and hitting its year high at $109.49. The stock’s volume more than tripled its average daily volume at 60.88 million shares, reflecting heavy trading activity. The Relative Strength Index (RSI) at 91 signals an overbought condition, heightening the risk of a near-term technical pullback. The stock price currently trades over double its 50-day and 200-day moving averages (~$50.90), underscoring strong bullish momentum but also potential short-term exhaustion. The MACD reading of 7.81 further confirms positive price momentum. Support consolidates near $90.24, while no immediate overhead resistance is identifiable above the current price.

For the next trading day (May 22, 2025), short-term volatility is likely, with a possible retracement towards the $103.97 stop-loss level as traders lock in profits after the sharp rally. Over the upcoming week, momentum could persist if volume sustains but any significant consolidation around $100 to $105 is plausible given the stretched technical readings and lack of resistance.

Fundamental Analysis

CoreWeave’s market capitalization stands at approximately $51.54 billion, based on 479.98 million shares outstanding. The company’s trailing twelve months (TTM) earnings per share (EPS) remain negative at -$2.53, resulting in a negative price-to-earnings (P/E) ratio of -42.45. This underscores ongoing unprofitability and the growth-stage nature of CRWV. However, the recent $2 billion debt offering priced at 9.25% senior notes reflects strong credit market access and confidence in CoreWeave’s growth prospects.

The revenue backlog of $29.9 billion with a 20-25% annual conversion rate implies a projected FY2026 revenue range between $6.00 billion and $7.48 billion. Expected EBITDA margins normalizing to 30-32% would yield $1.79 billion to $2.39 billion EBITDA, indicating potential for profitability improvement and significant operational leverage realization. These forward-looking estimates provide a fundamental underpinning to justify the current valuation premium despite negative EPS.

Intrinsic value remains difficult to pinpoint due to ongoing losses and aggressive growth investments. Consensus price targets average $56.13 with a median of $53, signaling analyst caution and valuation risk compared to the current $107 level. The disparity reflects skepticism about near-term earnings quality despite long-term growth opportunities in AI data center infrastructure.

Long-Term Investment Potential

CoreWeave operates in the burgeoning AI cloud infrastructure sector, positioned to capitalize on exponential demand for specialized computing power. The sizable backlog and entering EBITDA profitability phase support a longer-term growth narrative. However, the negative EPS and high debt cost (9.25%) introduce risk. Successful execution of backlog conversion and margin targets will be critical to realizing intrinsic value accretion.

Given the substantial recent price run-up and overbought RSI, long-term investors should weigh entry timing carefully, possibly awaiting a more moderated price level or confirmation of sustained profitability. The company’s growth trajectory and market positioning suggest potential for significant upside over multiple years, but the current valuation implies elevated expectations with inherent volatility risk.

Overall Evaluation

Categorizing CoreWeave as a Hold candidate best captures the current outlook. The technical breakout and positive momentum are strong but likely too stretched for near-term upside continuation without correction. Fundamentally, the company is on a promising growth path but remains unprofitable with high leverage and valuation discrepancies relative to analyst targets. Near-term risk from profit-taking and macroeconomic variables is elevated. The Hold status reflects a balanced view acknowledging both the significant growth potential and the prevailing uncertainties at this elevated price level.