CoreWeave just learned a brutal lesson about Wall Street’s patience: investors love a growth story right up until they see the bill. Shares of the Nvidia-backed cloud infrastructure company cratered nearly 20% on Friday after reporting plans to spend up to $35 billion in capital expenditures this year — more than double the $14.9 billion it burned through in 2025 and well above the $26.9 billion analysts had penciled in.
The sell-off wiped more than $8 billion from CoreWeave’s market value in a single session. CEO Mike Intrator went on CNBC’s “Squawk on the Street” to defend the spending, calling it a response to a “once in a generation moment” for AI infrastructure demand. “Our backlog is enormous,” he said. Fair enough — but the market wanted margins, not mantras.
Here’s the fundamental problem with CoreWeave’s business model, and it’s one that separates the neoclouds from the hyperscalers: money. The company had $3.13 billion in cash at last count. Microsoft has $24.3 billion. Amazon has $86.8 billion. CoreWeave is playing the same infrastructure game as the tech giants, except it’s doing it with borrowed money and a much thinner cushion. The company relies on debt to buy top-tier Nvidia chips, then rents them out to hyperscalers and AI companies like Microsoft and OpenAI. When times are good, it’s a printing press. When capital markets tighten, it’s a tightrope.
To his credit, Intrator pushed back on the debt narrative, noting that CoreWeave’s cost of capital has dropped 300 basis points over the past year — translating to roughly $700 million in savings. “That narrative is out there, but the data does not support it in any way, shape, or form,” he said. JPMorgan analysts weren’t quite as optimistic, warning that CoreWeave shares “would probably suffer disproportionately” if economic volatility picks up.
The bigger picture is this: CoreWeave’s pain illustrates the widening gap between AI believers and AI builders. Everyone agrees the demand is real. The question is whether companies with leverage-heavy balance sheets can survive long enough to profit from it. Peer Nebius — the Amsterdam-based cloud company that was once Yandex’s AI unit — saw its own capex surge to $2.1 billion in Q4 from $416 million a year earlier. The AI infrastructure buildout is happening at warp speed, but the road to profitability is littered with margin pressure and investor doubt.
For traders, CoreWeave is a high-conviction, high-volatility name. If you believe AI infrastructure demand is durable and the debt structure holds, this dip could be a gift. If you think the leverage is unsustainable, today’s action is just the beginning. Either way, this is a stock worth watching closely.