Author: Deep Tide TechFlow

On May 8, AI cloud computing provider CoreWeave (CRWV) plummeted 11.4% in a single day, closing at $114.15. This is another instance of a "performance day drop" for the company since its IPO in March last year. However, unlike previous occasions, this decline came with a more tension-filled contrast: Duan Yongping, widely known in the Chinese community as a disciple of Buffett, has just initiated a position in CoreWeave in the fourth quarter of 2025, amounting to about $20 million, calculated based on position size and the average price in the fourth quarter, close to the year’s lowest range for CoreWeave in December 2025.

CoreWeave is currently one of the most polarizing AI assets in the U.S. stock market. On one side is a nearly $100 billion order reserve and a narrative deeply tied to Nvidia as a "shovel seller"; on the other side is a financial reality where expanding scale is leading to larger losses, compounded by ongoing insider cashing out. The Q1 earnings report acts like a prism, clearly reflecting this divergence.

Q1 Earnings Report: Revenue Doubled but Losses Expanded, Q2 Guidance Piercing Valuation

CoreWeave's Q1 revenue was $2.08 billion, a year-on-year increase of 112% and a quarter-on-quarter increase of 32%, exceeding the LSEG market expectation of $1.97 billion. However, the adjusted loss per share was $1.12, worse than the expected loss of $0.90; the net loss expanded to $740 million, more than double from $315 million in the same period last year.

The true trigger for the sell-off was the forward guidance. The company provided a Q2 revenue range of $2.45 billion to $2.6 billion, with a midpoint of $2.53 billion, far below the market expectation of $2.69 billion. Meanwhile, the lower limit of total capital expenditure for 2026 was raised from $30 billion to $31 billion, which CFO Nitin Agrawal attributed to rising component prices.

The fragility of the profit structure was laid bare. Q1 adjusted EBITDA reached $1.16 billion (profit margin 56%), which seemed impressive; however, the adjusted operating profit was only $21 million, with the operating profit margin compressed to 1%. The reason lies in technology and infrastructure costs soaring 127% year-on-year to $1.27 billion and sales and marketing expenses surging over sixfold year-on-year to $69 million. Revenue is increasing, but costs are rising even faster.

CEO Michael Intrator emphasized on the earnings call, "We have reached hyperscale." He revealed that the company currently has 10 customers committed to spending over $1 billion, significantly improving concentration risk compared to 62% of 2024 revenues relying on Microsoft as a single customer. Intrator also predicted that CoreWeave's annualized revenue should exceed $30 billion by the end of 2027.

Bullish Narrative: $100 Billion Orders, Deeply Tied to Nvidia

At the core of the bullish logic is the order reserve. As of the end of Q1, CoreWeave's remaining performance obligations (RPO) reached $99.4 billion, with a quarterly net increase of approximately $33 billion, nearly quadrupling year-on-year. Intrator stated that the new contracts signed in Q1 exceeded $40 billion.

The customer list is also reshaping market perception. Q1 saw the addition of Anthropic as a customer, providing computing power support for its Claude series models; a $2.1 billion AI cloud agreement signed with Meta; trading company Jane Street committed about $6 billion in orders and completed a separate $1 billion equity investment. Nvidia again purchased $2 billion in Class A common stock of CoreWeave this quarter; the world's largest GPU supplier, also an investor and key customer of CoreWeave, has been referred to as Nvidia's "favorite child" due to this triple relationship.

In terms of financing structure, CoreWeave completed an $8.5 billion investment-grade HPC (High-Performance Computing) guaranteed delayed draw term loan (DDTL) in Q1, priced below 6%, which management referred to as "innovative." Year-to-date, the company has cumulatively secured over $20 billion in debt and equity financing, with a weighted average cost of debt decreasing by approximately 80 basis points. S&P Global Ratings upgraded CoreWeave's credit rating outlook from "stable" to "positive" during the same period.

Bearish Logic: The Larger the Scale, the Less Profitable; Debt Snowballing

However, another set of figures in the earnings report is generating anxiety. Q1 capital expenditures reached $6.8 billion, and the company expected Q2 capital expenditures to further climb to $7 billion to $9 billion. The Q2 interest expense guidance range is $650 million to $730 million, reflecting a rapid expansion of debt scale.

The total amount of debt has reached a staggering scale. As of the end of Q1, CoreWeave's total debt was approximately $25 billion. This figure, in relation to the company's current annual revenue scale, indicates a leverage level significantly higher than that of traditional cloud service providers. Morgan Stanley data shows that the total amount of debt financing for CoreWeave could reach about $11.8 billion throughout 2025, far exceeding the concurrent equity financing of about $1.5 billion; the company's core expansion tool is DDTL, a "pre-signing order financing" model where GPU procurement is financed against order contracts.

The sharpest doubts come from the quality of profits. Despite management repeatedly emphasizing a 56% EBITDA profit margin, the adjusted operating profit margin is only 1%. The "real" gross margin after deducting technology and infrastructure costs is about 4%, having compressed both quarter-on-quarter and against market expectations. Intrator attributed this to the transitional effects of scaling up, stating that the dilution effect on profit margins from newly added capacity during the rapid expansion from a 1-gigawatt operational scale is significant. He promised that this is the "low point" for margins, which will gradually rebound in future quarters.

However, the market is currently unwilling to pay for this promise. Analysts from Morgan Stanley and Jefferies provided positive evaluations, but CoreWeave has frequently experienced short-term pullbacks after every earnings report, and this decline is one of the most significant post-earnings drop.

Insiders Continuously Selling, Mirroring Duan Yongping's Bottom Fishing

Before and after the earnings report, insiders at CoreWeave have not paused their selling rhythm. CEO Mike Intrator sold 307,693 shares at the end of April; co-founders Brian Venturo and Chen Goldberg also have recorded sales; institutional shareholder Magnetar Financial previously sold over $300 million worth. Recent disclosures show that a major shareholder sold approximately 1.2 million shares again.

This forms a stark contrast with Duan Yongping's positioning in the fourth quarter. According to the 13F filing disclosed by H&H International Investment in February 2026, Duan Yongping first established a position in CoreWeave with 299,900 shares in the fourth quarter of 2025, when the company's stock price had pulled back over 65% from its peak, and market concerns about its debt structure peaked.

It's worth noting that CoreWeave only accounted for 0.12% of Duan Yongping's total holdings at H&H, representing a "light position testing the waters." During the same period, Duan Yongping significantly increased his position in Nvidia by over 1110% and initiated positions in Credo Technology (high-speed interconnect) and Tempus AI (AI healthcare), with the three new AI positions collectively accounting for less than 0.3%. This indicates that Duan Yongping's true heavy bet is Nvidia itself, while CoreWeave is more of a small extension layout in the downstream of the AI computing power industry chain.

The Key Question Now: Turning Point or Trap?

Intrator posed an emotionally charged rhetorical question during the Q&A segment of the earnings call: "I have always felt that everyone is staring at the tree of stock prices, missing out on the entire forest."

This statement aptly summarizes the current bull-bear standoff. The bulls see a forest of nearly $100 billion in contract reserves, diversified customer base, triple ties with Nvidia, and upgraded credit ratings; the bears see a tree with a 1% operating profit margin, expanding net losses, aggressive capital expenditures, and continuously selling insiders.

CoreWeave's stock price has still risen nearly 80% since the beginning of the year, with an increase of over 200% since its IPO. However, when a stock's bullish basis relies on long-term narratives while the bearish basis relies on current numbers, every earnings report becomes a battleground for these two narratives. Duan Yongping previously told Fang Sanwen in an interview: "AI is a huge revolution brought by the qualitative change in computing power, likely surpassing the internet and industrial revolutions. The current AI bubble is obvious, and nine out of ten companies may be eliminated, but those that survive will become the next giants." His 0.12% light position itself acknowledges the uncertainty of this gamble.

The next testing point is clear: Q2 earnings report. If the operating profit margin does not rebound as promised by management, the credibility of the "forest" narrative will face a true stress test.