Be Careful Buying CoreWeave
Summary
- CoreWeave has surged post-IPO, capitalizing on AI demand and Nvidia's ecosystem, but much of the near-term upside appears priced in.
- The company faces significant risks: heavy reliance on Nvidia, customer concentration (notably Microsoft and OpenAI), and substantial debt for rapid expansion.
- Despite explosive revenue growth and strong partnerships, CoreWeave's high valuation and capital intensity make it vulnerable to industry cycles and overbuilding.
- Given these factors, I recommend holding CoreWeave stock until it achieves greater scale and stability, avoiding overpaying in a volatile sector.
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