When CoreWeave (NASDAQ: CRWV) slipped below its $40 IPO price earlier this year, skeptics wrote it off as an over-hyped AI play.
Three months later the stock had soared by around 365 %, briefly topping $155 per share before settling in the mid-$150s.
Such whiplash raises a bigger question of where CoreWeave will trade over the next year?
Revenue Exploding But Margins are Messy
It’s worth looking back to note that CoreWeave sold 37.5 million new shares at $40, 23 % fewer than originally planned, raising about $1.5 billion at IPO.
Post-offering, it had about 285 million basic shares outstanding for a $23 billion market value on day one. That share count matters, because most price targets circulating online still use CoreWeave’s pre-IPO share total, meaning upside and dilution risk are often mis-calculated.
CoreWeave’s top line jumped from $229 million in 2023 to $1.9 billion in 2024, a 730 % leap, and another 420 % year-over-year in Q1 2025 to $982 million.
Yet the company still posted a $315 million net loss last quarter as interest expense ballooned to $264 million, an overlooked side effect of rapid, debt-funded data-center buildouts.
The $25.9 billion Backlog Is Being Missed
Buried deep in CoreWeave’s May earnings release is an extraordinary statistic that CoreWeave ended Q1 with $25.9 billion in contracted backlog, including $14.7 billion of remaining performance obligations plus another $11.2 billion tied to capacity reservations.
Management says more than 90 % of near-term revenue flows from “take-or-pay” deals, and customers pay whether they use the compute or not. That visibility is rare in the cyclical infrastructure world and helps explain why investors tolerate razor-thin margins today.
In Q1, CoreWeave inked an up-to-$11.9 billion infrastructure agreement with OpenAI, later expanded by another $4 billion and sweetened with a $350 million OpenAI equity investment.
This single customer has the potential to generate more revenue than CoreWeave logged in its entire history to date. There is a catch, though, because Microsoft, Nvidia and OpenAI contributed 77 % of 2024 sales, so concentration risk remains acute.
Nvidia Is a Supplier and GateKeeper
Every GPU in CoreWeave’s fleet is made by Nvidia, and the hyperscaler routinely gets first dibs on Nvidia’s bleeding-edge parts, including last week’s rollout of GB300 NVL72 and RTX Pro 6000 “Blackwell” servers.
Access to silicon others can’t get is a massive competitive advantage, but it leaves CoreWeave hostage to Nvidia’s pricing power and product roadmap.
Nevertheless, CoreWeave stunned the market in Q2 by agreeing to acquire Core Scientific in an all-stock deal worth about $9 billion.
Core Scientific brings 1.21 gigawatts of power capacity, including an 840 MW campus in Austin that already hosts many of CoreWeave’s servers, instantly eliminating costly lease payments and bottlenecks.
With AI workloads devouring electricity, owning the power hook-ups could prove invaluable over the next decade.
Core Scientific holders will receive 0.1235 CoreWeave shares for each CORZ share, without any collar or floor.
Reports note that the market is pricing November CRWV puts around $115, well below today’s spot price, signaling real worry that CoreWeave shares are possibly going to slide before the transaction closes in Q4.
If the stock falls 25 %, Core Scientific owners (and by extension CoreWeave’s new shareholders) absorb the loss, adding to dilution concerns for existing investors.
Debt Mountain Looms Large
To secure GPUs ahead of demand, CoreWeave arranged a $7.5 billion conventional-debt round in May 2024, the biggest debt raise in private tech that year.
Layer on management’s projected Q2 2025 capex of $3 – $3.5 billion, and interest expense is set to double again by 2026 unless revenue scales flawlessly.
And then there’s roughly 180 million pre-IPO shares, including a sizable slug held by early backer Magnetar Financial, come off lock-up in early August.
Some analysts warn that forced selling from hedge funds eager to crystallize triple-digit gains will pressure the stock right when CoreWeave is trying to keep its currency high for the Core Scientific buyout.
The Next 12 Months
CoreWeave guides 2025 revenue to $4.9 – $5.1 billion. Using today’s 8.7× forward-sales valuation, the market is implicitly valuing 2025 sales at the high end of guidance.
Below are three scenarios that factor in dilution (about 320 million shares post-Core Scientific) and different sales multiples:
What To Pay Attention To Now
Keep an eye on Q2 & Q3 earnings, and specifically proof that backlog converts to cash without further gross-margin erosion. And whatever you do don’t skip past the lock-up expiration of Aug 2025, where selling may swamp demand?
The Nvidia GPU roadmap is crucial to success also, because any slip in Blackwell volumes is likely to delay capacity online.
Another worry is power-cost inflation and in particular electricity prices that are up double-digits in Texas, owning 1.2 GW of power is great unless the kilowatts get pricier than expected.
Where Will CoreWeave Stock Be in 1 Year?
If CoreWeave hits the midpoint of guidance, maintains its current backlog conversion rate and navigates the August lock-up without a wave of selling, a mid-$100s share price a year from now looks plausible, roughly 10 % lower than today but still 3× the IPO print.
That sits between the base and bull cases but investors need to keep three under-the-radar facts in mind:
A single point rise in CoreWeave’s blended borrowing cost shaves about $750 million off annual free cash flow once all debt is drawn.
Also backlog ≠ revenue until power and GPUs are online. Roughly 1.6 GW of the company’s power is merely “contracted,” not yet energized.
And customer concentration remains extreme. If OpenAI (or Microsoft, which ultimately foots that bill) throttles spend, CoreWeave’s topline can’t possibly fill the gap in the near term.
CoreWeave is skating where the AI puck is headed, vertically integrated power, priority access to Nvidia silicon, and multi-year take-or-pay contracts. Those traits could justify a premium multiple for years if the company controls leverage and keeps the lights on at scale.
Over the next 12 months, though, investors face a classic tug-of-war via staggering growth and scarce GPUs versus dilution, debt and a looming lock-up.
Expect the stock to trade more like a call option on the AI compute cycle than a sleepy cloud utility.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.