Author: Deep Tide TechFlow
On May 8, AI cloud computing provider CoreWeave (CRWV) plummeted 11.4% in a single day, closing at $114.15. This marks another instance of "earnings day decline" for the company since its IPO in March of last year. However, unlike previous times, this sell-off is compounded by a more dramatic contrast: Duan Yongping, widely known in Chinese circles as a disciple of Warren Buffett, just established a new position in CoreWeave in Q4 2025, amounting to approximately $20 million. Based on the position size and the Q4 average price, his entry point was close to CoreWeave's lowest range for the year in December 2025.
CoreWeave is currently one of the most divisive AI assets in the US stock market. On one side is the narrative of being a "pick-and-shovel seller" deeply tied to Nvidia, backed by nearly $100 billion in order backlog; on the other side is the financial reality of expanding losses with scale, alongside continuous insider selling. The Q1 earnings report acted like a prism, refracting this divide with stark clarity.
Q1 Earnings: Revenue Doubles but Losses Widen, Q2 Guidance Punctures Valuation
CoreWeave's Q1 revenue reached $2.08 billion, a 112% year-over-year increase and a 32% sequential increase, surpassing the LSEG market consensus of $1.97 billion. However, adjusted earnings per share loss was $1.12, worse than the expected loss of $0.90; the net loss widened to $740 million, more than doubling from $315 million a year ago.
The forward guidance is what truly ignited the sell-off. The company provided a Q2 revenue range of $2.45 billion to $2.6 billion, with a midpoint of $2.53 billion, significantly lower than the market expectation of $2.69 billion. Concurrently, the lower limit for the full-year 2026 capital expenditure was raised from $30 billion to $31 billion, with CFO Nitin Agrawal attributing the increase to rising component costs.
The fragility of the profit structure was laid bare. While Q1 adjusted EBITDA reached $1.16 billion (a 56% margin), which appeared impressive; adjusted operating profit was merely $21 million, compressing the operating margin to just 1%. The reason lies in the 127% year-over-year surge in technology and infrastructure costs to $1.27 billion, and sales and marketing expenses skyrocketing over sixfold 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 clients committed to spending over $1 billion each, a significant improvement in concentration risk compared to 2024 when 62% of revenue relied on a single customer, Microsoft. Intrator also projected that CoreWeave's annualized revenue should exceed $30 billion by the end of 2027.
The 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) stood at $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 roster is also reshaping market perception. In Q1, CoreWeave added Anthropic as a client, providing computing power for its Claude series models; signed a $2.1 billion AI cloud agreement with Meta; trading firm Jane Street committed to roughly $6 billion in orders and separately completed a $1 billion equity investment. Nvidia purchased an additional $2 billion worth of CoreWeave Class A common stock this quarter. This global largest GPU supplier is simultaneously an investor and a significant customer of CoreWeave, a tripartite relationship dubbed 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 raised 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 upgraded CoreWeave's credit rating outlook from "stable" to "positive."
The Bear Logic: Bigger Scale, Less Profit, Debt Snowball Grows 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 expansion of the debt pile.
The total debt burden is already staggering. As of the end of Q1, CoreWeave's total debt was approximately $25 billion. Relative to the company's current annualized revenue scale, this leverage level is significantly higher than that of traditional cloud service providers. Morgan Stanley data shows that CoreWeave's debt financing for the full year 2025 reached about $11.8 billion, far exceeding the approximately $1.5 billion in equity financing during the same period. The company's core expansion tool is the DDTL, a "book-then-fund" model where it secures bank financing to purchase GPUs, using order contracts as collateral.
The sharpest criticism stems from profit quality. Although management repeatedly highlights the 56% EBITDA margin, the adjusted operating margin is only 1%, and the "real" gross margin after deducting technology and infrastructure costs is about 4%, showing compression both sequentially and against market expectations. On the call, Intrator attributed this to the phased effects of scaling, where the dilution effect on margins from adding new capacity is immense when expanding rapidly from a 1-gigawatt operational scale. He promised this was the "low point for margins," which would gradually rebound in future quarters.
However, the market is currently unwilling to pay for that promise. While analysts from Morgan Stanley and Jefferies issued positive evaluations, CoreWeave has experienced short-term pullbacks after every previous earnings report, with this decline being one of the steeper ones.
Ongoing Insider Selling, Mirroring Duan Yongping's Bottom Fishing
Around the earnings release, CoreWeave insiders continued their selling. 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 offloaded over $300 million worth. The latest disclosures show another major shareholder recently sold approximately 1.2 million shares.
This forms a stark contrast with Duan Yongping's Q4 position building. According to a 13F filing by H&H International Investment in February 2026, Duan Yongping initiated a position in CoreWeave of 299,900 shares in Q4 2025, when the company's stock price had retreated over 65% from its highs, and market concern over its debt structure peaked.
It is noteworthy that CoreWeave constitutes only 0.12% of Duan Yongping's total H&H portfolio, a "light test" position. During the same period, Duan aggressively increased his Nvidia stake by over 1110% and initiated new positions in Credo Technology (high-speed connectivity) and Tempus AI (AI healthcare), with these three new AI positions combined accounting for less than 0.3%. This suggests Duan's real heavy bet is on Nvidia itself, with CoreWeave resembling a small, extended bet on the downstream AI computing supply chain.
The Key Question Now: Inflection Point or Trap?
During the Q&A session of the earnings call, Intrator posed an emotionally charged rhetorical question: "I've always felt like everyone is staring at the stock price tree and missing the whole forest."
This statement aptly summarizes the current bull-bear standoff. The bulls see the forest: the nearly $100 billion contract backlog, diversified customer base, tripartite Nvidia ties, and the credit rating upgrade. The bears see the tree: the 1% operating margin, widening net loss, aggressive capital expenditure, and continuously selling insiders.
CoreWeave's stock price is still up nearly 80% year-to-date and over 200% since its IPO. However, when a stock's bull case relies on long-term narratives while the bear case rests on current numbers, every earnings report becomes a battleground for these two narratives. In a previous interview with Fang Sanwen, Duan Yongping stated: "AI is a massive revolution brought about by qualitative changes in computing power, potentially exceeding the impact of the internet and industrial revolutions. There is a clear AI bubble currently; 90% of companies may be eliminated, but the survivors will become the next generation of giants." His 0.12% light position itself acknowledges the uncertainty of this gamble.
The next test point is already clear: the Q2 earnings report. If the operating margin fails to rebound as promised by management by then, the credibility of the "forest" narrative will face a real stress test.
