CoreWeave, a cloud platform specializing in AI infrastructure management, experienced a notable decline in its stock price, closing Friday at $89.25, a drop of 8.12%. This downturn followed the revelation that Blue Owl Capital’s attempt to secure $4 billion in debt financing for a Pennsylvania data center linked to CoreWeave was unsuccessful. Investors are now expressing heightened concerns regarding project financing, particularly as they await CoreWeave’s earnings report scheduled for February 26, along with ongoing risks associated with securities litigation.
The trading volume for CoreWeave reached 46 million shares, significantly exceeding its three-month average of 27.9 million shares by approximately 65%. Since its IPO in 2025, CoreWeave’s stock has appreciated 123%, although recent events suggest a volatile outlook.
On the broader market front, the S&P 500 index rose by 0.70% to close at 6,910, while the Nasdaq Composite increased by 0.90%, finishing at 22,886. Among peers in the internet services and infrastructure sector, Microsoft saw a modest decline, closing at $397.23 (-0.31%), while Alphabet showed a stronger performance, finishing up by 4.01% at $314.98.
The fallout from Blue Owl’s failed financing attempt has cast a shadow over CoreWeave, raising fears about its ability to fund future AI capacity projects. Despite reassurance that the project remains on course, investor sentiment appears cautious due to uncertainty. The issuance of an “Equal Weight” rating from Morgan Stanley, coupled with a price target of $99 for CoreWeave, did not instill enough confidence to prompt investors to increase their bids.
Potential investors are advised to carefully consider their options before purchasing shares in CoreWeave. Notably, the Motley Fool Stock Advisor team has highlighted ten stocks they believe are currently better investment opportunities, excluding CoreWeave. Historical performances of stocks that made similar recommendations in the past, such as Netflix and Nvidia, showcase significant potential returns, further emphasizing the need for caution.
Overall, with a volatile market environment and critical earnings reports on the horizon, the immediate future for CoreWeave remains uncertain as investors weigh their options.
