Why Shares of CoreWeave Are Plunging This Week

Key Points

• CoreWeave reported impressive Q2 2025 results, including strong backlog growth.

• The company doesn't project progress toward profitability in adjusted operating income for 2025.

• Current shareholders shouldn't recognize the sell-off as a reason to hit the panic button.

• 10 stocks we like better than CoreWeave ›

While it seemed like shares of CoreWeave (NASDAQ: CRWV) were on a perpetually higher trajectory, the artificial intelligence (AI) hyperscaler's stock proved otherwise this week. Investors were less than thrilled with the company's second-quarter 2025 financial results, and the bearish stance that analysts have taken toward CoreWeave have motivated investors to trim their positions or exit them altogether.

According to data provided by S&P Global Market Intelligence, as of 1:47 p.m. ET Thursday, shares had plummeted 21.3% since the end of last Friday's trading session.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Investors aren't distracted with a rosier outlook for 2025

Reporting second-quarter results on Tuesday, management thought it gave investors a lot to celebrate. Besides beating analysts' revenue estimates, it reported strong year-over-year growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) as well as a more robust backlog than what it had at the same point last year.

What's troubling investors, however, is the apparent lack of progress the company will make toward achieving profitability in 2025. In the second quarter, it reported an adjusted operating income margin of 16.4%, narrower than the 21.5% number it reported for the same period last year. Moreover, if CoreWeave achieves the midpoint of its 2025 guidance and reports adjusted operating income of $815 million on revenue of $5.25 billion, it will represent an adjusted operating income margin of 15.5%.

Should investors unknit CoreWeave from their portfolios amid the market sell-off?

Growth stocks like CoreWeave often demonstrate considerable volatility once they hold their initial public offerings (IPOs). With the AI hyperscaler debuting on public markets in March, the wild swings in its stock are unsurprising.

Concerns about the company's profitability are valid, but it's way too soon for long-term investors to enter panic mode and sell their positions. If you're a CoreWeave shareholder today, the best route is to stay the course.

Should you invest $1,000 in CoreWeave right now?

Before you buy stock in CoreWeave, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CoreWeave wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $649,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,113,059!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 13, 2025

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.