Author: Deep Tide TechFlow
On May 8, AI cloud computing power supplier CoreWeave (CRWV) plunged 11.4% in a single day, closing at $114.15. This marked another "earnings day decline" since the company's IPO in March last year. However, unlike previous drops, this decline coincided with a more dramatic contrast: Duan Yongping, widely known in the Chinese-speaking community as a disciple of Warren Buffett, had just established his first position in CoreWeave in Q4 2025, with an allocation of approximately $20 million. Based on the position size and the Q4 average price, the entry point was close to CoreWeave's lowest level for the year in December 2025.
CoreWeave is currently one of the most divisive AI assets in the US stock market. On one side lies the narrative of being the "picks and shovels" seller with nearly $100 billion in order backlog and deep ties to Nvidia; on the other side is the financial reality of widening losses despite scale expansion and continuous insider selling. The Q1 earnings report acted like a prism, making this divergence exceptionally clear.
Q1 Earnings: Revenue Doubles but Losses Widen, Q2 Guidance Punctures Valuation
CoreWeave's Q1 revenue was $2.08 billion, a 112% year-over-year increase and a 32% sequential increase, surpassing the LSEG market expectation of $1.97 billion. However, adjusted loss per share was $1.12, worse than the expected loss of $0.90. Net loss expanded to $740 million, more than doubling from $315 million in the same period last year.
What truly ignited the sell-off was the forward guidance. The company provided a Q2 revenue range of $2.45 billion to $2.6 billion, with a midpoint of $2.53 billion, far below the market expectation of $2.69 billion. Simultaneously, the lower limit of full-year 2026 capital expenditure was raised from $30 billion to $31 billion, which CFO Nitin Agrawal attributed to rising component costs.
The fragility of the profit structure was exposed. Q1 adjusted EBITDA reached $1.16 billion (a 56% margin), seemingly impressive, but adjusted operating profit was only $21 million, with the operating margin compressed to 1%. The reason lies in technology and infrastructure costs soaring 127% year-over-year to $1.27 billion, and sales & marketing expenses skyrocketing over 6 times year-over-year to $69 million. Revenue is growing, but costs are growing faster.
CEO Michael Intrator emphasized on the earnings call: "We have reached hyperscale." He disclosed that the company now has 10 customers committed to spending over $1 billion each. Compared to 2024 when 62% of revenue relied on Microsoft as a single customer, concentration risk has significantly improved. Intrator also expects CoreWeave's annualized revenue to exceed $30 billion by the end of 2027.
Bull Narrative: $100 Billion Order Backlog, Deep Ties with Nvidia
The core supporting the bull case is the order backlog. As of the end of Q1, CoreWeave's remaining performance obligations (RPO) amounted to $99.4 billion, a net increase of approximately $33 billion sequentially and nearly quadrupling year-over-year. Intrator stated that new contracts signed in Q1 alone exceeded $40 billion.
The client list is also reshaping market perceptions. In Q1, Anthropic was added as a customer, providing computing power for its Claude series models; a $2.1 billion AI cloud agreement was signed with Meta; trading firm Jane Street committed to approximately $6 billion in orders and separately completed a $1 billion equity investment. Nvidia again purchased $2 billion worth of CoreWeave Class A common stock this quarter. This global largest GPU supplier is simultaneously an investor and a major customer of CoreWeave. This triple-role binding relationship is referred to as Nvidia's "favored son."
Regarding financing structure, CoreWeave completed an $8.5 billion investment-grade HPC (High-Performance Computing) secured delayed draw term loan (DDTL) in Q1, priced below 6%, hailed by management as "groundbreaking." Year-to-date, the company has secured over $20 billion in debt and equity financing, with the weighted average cost of debt decreasing by approximately 80 basis points. S&P Global Ratings concurrently revised CoreWeave's credit rating outlook from "stable" to "positive."
Bear Logic: Less Profitable as it Scales, Debt Snowball Growing Larger
However, another set of numbers in the earnings report is causing anxiety. Q1 capital expenditure reached $6.8 billion, and the company expects Q2 capital expenditure to further climb to between $7 billion and $9 billion. The Q2 interest expense guidance range is $650 million to $730 million, reflecting the rapid swelling of debt.
The total debt is already staggering. As of the end of Q1, CoreWeave's total debt stood at approximately $25 billion. Relative to the company's current annualized revenue level, this leverage is significantly higher than that of traditional cloud service providers. Morgan Stanley data shows that CoreWeave's debt financing for the full year 2025 amounted to about $11.8 billion, far exceeding its equity financing of about $1.5 billion. The company's core expansion tool is the DDTL, a "book first, finance later" model that uses order contracts as collateral to secure bank financing for GPU procurement.
The sharpest criticism comes from profit quality. Although management repeatedly emphasized the 56% EBITDA margin, the adjusted operating margin was only 1%. The "real" gross margin after deducting technology and infrastructure costs was about 4%, showing compression both sequentially and against market expectations. Intrator attributed this on the earnings call to the temporary effect of rapid scaling, where the dilution effect on margins from newly added capacity is immense when a company expands dramatically from a 1-gigawatt operational scale. He promised this was the "margin low point" and that margins would gradually recover in future quarters.
But the market is currently unwilling to pay for this promise. While analysts from Morgan Stanley and Jefferies gave positive reviews, CoreWeave has experienced short-term pullbacks after each earnings report previously, with this decline being one of the steeper post-earnings drops.
Insider Selling Continues, Mirroring Duan Yongping's Bottom-Fishing
Around the earnings release, CoreWeave insiders maintained their selling pace. CEO Mike Intrator sold 307,693 shares in late April; co-founders Brian Venturo and Chen Goldberg also recorded sales; institutional shareholder Magnetar Financial had previously sold over $300 million worth. Latest disclosures show that another major shareholder recently sold approximately 1.2 million shares.
This forms a stark contrast with Duan Yongping's position-building in Q4. According to a 13F filing disclosed by H&H International Investment in February 2026, Duan Yongping established his first position in CoreWeave of 299,900 shares in Q4 2025, at a time when the stock had retreated more than 65% from its highs, and market concerns over its debt structure had peaked.
It's noteworthy that CoreWeave accounts for only 0.12% of Duan Yongping's total H&H holdings, constituting a "small pilot" position. In the same quarter, Duan massively increased his stake in Nvidia by over 1110% and established new positions in Credo Technology (high-speed connectivity) and Tempus AI (AI healthcare). These three new AI positions combined account for less than 0.3% of his portfolio. This indicates Duan's true heavy bet is Nvidia itself, with CoreWeave being more like a small extension of his bet on the downstream AI computing power supply chain.
The Crucial Question Now: Inflection Point or Trap?
Intrator posed a somewhat emotional rhetorical question during the Q&A session: "I've always felt that everyone is staring at the stock price tree and missing the entire forest."
This statement aptly summarizes the current bull-bear standoff. Bulls see a forest of nearly $100 billion in contract backlog, a diversified customer base, a triple-binding relationship with Nvidia, and an upgraded credit rating. Bears see a tree of 1% operating margins, widening net losses, aggressive capital expenditures, and persistent insider selling.
CoreWeave's stock price is still up nearly 80% year-to-date and has gained over 200% since its IPO. But when the bull case for a stock rests on a distant narrative and the bear case on current numbers, every earnings report becomes a battleground for these two narratives. Duan Yongping previously stated in an interview with Fang Sanwen: "AI is a massive revolution brought about by a qualitative leap in computing power, with an impact potentially exceeding that of the internet and the industrial revolution. There is a clear AI bubble now, and 90% of companies may be eliminated, but the survivors will become the next-generation giants." His 0.12% light position itself acknowledges the uncertainty of this gamble.
The next test is already clear: the Q2 earnings report. If the operating margin does not recover as promised by management, the credibility of the "forest" narrative will face a genuine stress test.
