CoreWeave, Inc. (CRWV): A Bull Case Theory

We came across a bullish thesis on CoreWeave, Inc. on Level-Headed Investing’s Substack by Bernardo. In this article, we will summarize the bulls’ thesis on CRWV. CoreWeave, Inc.'s share was trading at $73.12 as of November 28th.

CoreWeave (CRWV) has emerged as a high-profile player in the AI infrastructure space, capturing attention with its GPU rental model and rapid growth fueled by hyperscalers like Microsoft, Google, and Amazon. The company operates 33 data centers with over 250,000 NVIDIA GPUs, positioning itself as a key enabler of generative AI workloads.

While revenue has surged—$1.9 billion in 2024 and $1.2 billion in Q2 2025—profitability tells a different story. GAAP operating margins are thin, and net losses remain substantial due to enormous depreciation, interest, and CapEx obligations, reflecting the capital-intensive nature of a business that relies on fast-aging hardware. Despite an adjusted EBITDA margin of 62%, CoreWeave’s actual cash generation is negative, highlighting the disconnect between headline growth and durable profitability.

The company’s growth is heavily debt-financed, with total borrowings reaching $11.17 billion, mostly secured against GPUs whose value declines as new chips are released. Financing comes primarily through Delayed-Draw Term Loan (DDTL) facilities, which extend credit based on customer contracts, creating a fragile structure dependent on continued demand and refinancing.

Customer concentration compounds the risk: Microsoft alone accounted for 62–71% of revenue in 2024–Q2 2025. Any slowdown or contract renegotiation could trigger liquidity stress, while replacement cycles for GPUs ensure that inflows are largely consumed by ongoing CapEx.

CoreWeave’s model resembles a commodity service more than a platform, lacking sticky software, developer ecosystems, or proprietary advantages. Its reliance on leveraged growth, concentrated clients, and a perpetual hardware replacement loop underscores structural fragility.

While AI infrastructure demand is secular and substantial, CoreWeave’s current business risks, including leverage, concentration, and obsolescence, suggest that sustainable economics have yet to be proven, leaving investors exposed to significant operational and financial risk despite impressive top-line expansion.

Previously we covered a bullish thesis on Palantir Technologies Inc. (PLTR) by Deep Value Returns in May 2025, which highlighted the company’s strong AI growth, $1 billion+ quarterly revenue, and robust government and commercial contracts. The company's stock price has appreciated approximately by 54.74% since our coverage. The thesis still stands as PLTR’s scale and profitability remain compelling. Bernardo shares a similar bullish view on CoreWeave, Inc., but emphasizes risks from heavy leverage, customer concentration, and capital-intensive GPU infrastructure.

CoreWeave, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held CRWV at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the potential of CRWV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.