Remember CoreWeave? That AI infrastructure company that’s been absolutely crushing it since going public in March, up over 200%? Well, someone just crashed the party with a reality check so harsh it makes Gordon Ramsay look gentle.
Enter Kerrisdale Capital, the short-selling firm that basically just published a 90-page dissertation titled “Why CoreWeave Is Actually Just Expensive GPU Rental With Extra Steps.” And honestly? They didn’t hold back.
Here’s the tea: Kerrisdale thinks CoreWeave should be trading at $10 per share. That’s not a typo – they’re calling for a 90%+ haircut from current levels. Ouch.
Their argument? CoreWeave isn’t the AI innovation powerhouse everyone thinks it is. According to Kerrisdale, it’s basically just “a debt-fueled GPU rental business with no moat, dressed up as innovation.” That’s like saying your trendy co-working space is just expensive desk rental with kombucha on tap.
The timing is particularly spicy because while CoreWeave has been riding high, its competitors have been landing massive deals. Microsoft just dropped $17.4 billion on Nebius, and Oracle’s revenue forecast had everyone losing their minds. Meanwhile, CoreWeave’s biggest customers are apparently giving their business to… literally everyone else.
“Bulls latch onto the ‘insatiable demand’ narrative and hope a rising tide will lift all boats,” Kerrisdale wrote. Translation: Just because AI is hot doesn’t mean every AI-adjacent company deserves to be valued like the next Google.
The short-seller’s main gripes are pretty straightforward:
No Secret Sauce: CoreWeave doesn’t have proprietary technology or defensible intellectual property. They’re basically renting out GPUs, which is about as differentiated as being an Uber driver with a really nice car.
Power Problems: The AI sector is facing massive power constraints, and CoreWeave apparently has no special edge in solving this. That’s like being a food truck without knowing where to park.
Math Doesn’t Math: Here’s the kicker – Kerrisdale claims CoreWeave generates returns below its cost of capital. In finance speak, that means they’re destroying shareholder value rather than creating it. It’s like spending $20 to make $15 and calling it a business model.
Now, before you start feeling too bad for CoreWeave, remember that short-sellers aren’t exactly neutral observers. They literally make money when stocks go down, so take their “objective analysis” with a grain of salt the size of a GPU chip.
But here’s what’s interesting: even if you think Kerrisdale is being overly harsh, their core point about differentiation is worth considering. In a world where everyone’s chasing AI infrastructure plays, what makes one GPU rental company better than another?
The real question isn’t whether AI demand is real (it obviously is), but whether CoreWeave can carve out a sustainable competitive advantage in a market that’s getting more crowded by the day. Because at the end of the day, being in the right sector isn’t enough – you need to be the right company in the right sector.
CoreWeave hasn’t responded to the report yet, but you can bet their investor relations team is having a fun week. Sometimes the market’s reality check comes from earnings. Sometimes it comes from a short-seller with a PDF and an attitude.