CoreWeave Has Fallen 49% From Its 52-Week High. Is the Beaten-Down AI Stock a Bargain or a Value Trap?
The backlog is enormous. So are the losses and the capital bills behind it.
Overview
Few stocks capture the AI infrastructure boom -- and its risks -- quite like CoreWeave (NASDAQ: CRWV). The company rents out the high-end computing power that trains and runs AI models, and demand for it has been ferocious. Yet as of this writing, shares sit near $77 -- about 49% below the 52-week high of $153.20.
The latest leg down has a specific cause. Earlier this month, reports surfaced that Meta Platforms plans to build its own AI cloud business and sell excess capacity to outside customers. Meta happens to be one of CoreWeave's largest customers, so the news raised an uncomfortable possibility: one of the company's biggest buyers may be about to become a competitor.
Details
Shares have fallen for four straight sessions since. For dip buyers, a decline like this is tempting. But a lower price only helps if the business underneath it can support the stock. So, which is this, a bargain or a value trap?
Source
Originally published at www.fool.com.