CoreWeave Stock Plummets, Revealing Real Challenges for AI Infrastructure Companies

After reading the Herald Economy article, I had a lot to think about. How many people have heard of a company called CoreWeave? To be honest, I learned about it in detail through this article, and it seems this American cloud company is currently in quite a difficult situation. A 37.98% drop in stock price in just one month is indeed a serious level.

What’s more surprising is that this company received investment from NVIDIA. If they received investment from NVIDIA, they should be a promising company related to AI semiconductors, yet their stock, which once rose to $183, has now fallen to $78.34, almost halving. As of November 16, 2025, it’s intriguing to see such a sharp decline even amid the ongoing AI boom.

According to the article, CoreWeave’s third-quarter performance itself wasn’t bad. With revenue of $1.36 billion, they exceeded the market expectation of $1.29 billion, and the loss per share was only 22 cents, much less than the expected 51 cents. So why did the stock price plummet like this? The answer lies in the downward revision of revenue forecasts.

The company reportedly lowered its 2024 full-year revenue forecast from $5.15 billion-$5.35 billion to $5.05 billion-$5.15 billion, and the reason is interesting. They cited “schedule delays from data center partners,” which seems to highlight the realistic challenges of the AI infrastructure business. While AI demand is exploding, building the actual physical infrastructure takes time and can encounter unexpected delays.

Common Concerns Among AI Infrastructure Companies

It doesn’t seem to be a problem unique to CoreWeave. The article mentions that Oracle also fell by 27.23% over a month. Oracle, a giant company headquartered in Austin, California, is experiencing similar difficulties, indicating it could be an industry-wide issue. Other companies like Ayar Labs are also seeing red flags in their stock prices.

Particularly noteworthy is the widening of CDS (Credit Default Swap) premiums. CDS is essentially an insurance concept against the risk of a company going bankrupt, and a rise in this price means the market perceives a higher risk of default for that company. CoreWeave’s 5-year CDS price has jumped over 53% since early October, which is a very serious signal.

The insights from Bear Traps Report, an investment research firm, seem to hit the nail on the head. CoreWeave is heavily indebted to build data centers, and as the stock price falls, the proportion of debt and negative cash flow in the company’s value increases, creating a vicious cycle. In fact, their debt ratio surged from 291% in the second quarter to 363% in the third quarter, which is indeed a dangerous level.

The current ratio is also a problem. The current ratio, which had risen in the first and second quarters after the fourth quarter of last year, fell below 50% again in the third quarter, signaling difficulties in short-term fund management. Combining these indicators, it becomes clear that CoreWeave is under significant pressure in managing cash flow.

The Reality and Outlook of the AI Infrastructure Market

The analysis by Kiwoom Securities researcher Jo Man-joo seems to summarize the situation well. “The biggest risk is the delay in facility ramp-up due to excessively high demand, which delays revenue recognition and burdens short-term performance,” he said, illustrating the dilemma of the AI infrastructure business. There’s plenty of demand, but it’s hard to meet the supply.

However, there is a hopeful aspect. The company stated that major clients are already aware of and have agreed to the CAPEX (capital expenditure) delays, and there have been no backlog cancellations. The contracted volumes are expected to be immediately reflected as revenue upon the completion of data centers in the first quarter of next year, suggesting that while there are short-term difficulties, the mid-to-long-term outlook might be positive.

In fact, the AI infrastructure market itself is still on a clear growth trajectory. As of 2025, the usage of conversational AI services like ChatGPT, Claude, and Gemini is surging, and companies are accelerating AI adoption. Big tech companies like Microsoft’s Azure AI, Amazon’s AWS AI services, and Google Cloud’s Vertex AI are investing billions in AI infrastructure.

However, the CoreWeave case shows that despite these vast market opportunities, there are many realistic challenges in operating the actual business. Building data centers requires enormous capital, and complex factors like power supply, site acquisition, and equipment procurement must align. The shortage of key components like NVIDIA’s H100 GPUs remains an issue.

Personally, I see CoreWeave’s situation as a natural phenomenon occurring during the maturation process of the AI infrastructure market. Initially, stock prices soared on expectations, but as the business was actually operated, more complex and difficult aspects emerged than anticipated. Only through such adjustment processes can truly competitive companies survive.

As researcher Jo Man-joo mentioned, “Continuous monitoring is necessary until the first quarter of next year.” Whether CoreWeave can normalize data center ramp-up as promised and whether cash flow improvement can actually be achieved will be key points. If revenue indeed surges in the first quarter of next year, the stock price is likely to rebound, but if further delays or issues arise, they could face even greater difficulties.

Ultimately, this could serve as a valuable lesson for investors considering AI infrastructure investments. Just because the market outlook is bright doesn’t mean all related companies will succeed; it’s crucial to carefully examine actual business execution capabilities and financial soundness. It reminds us once again not to overlook basic financial indicators like debt ratios or cash flow.

This article was written after reading a Herald Economy article and adding personal opinions and analysis.

Disclaimer: This blog is not a news outlet, and the content written reflects the author’s personal views. The responsibility for investment decisions lies with the investor, and no responsibility is taken for investment losses based on the content of this article.