CoreWeave Below $100 📉 Bargain or Value Trap?

CoreWeave just hit a major milestone: its first post-IPO lock-up expiration. Nearly 84% of Class A shares are now free to trade — many of them held by insiders and key backer Nvidia. That sudden flood of supply rattled the stock, which briefly sank below the psychological $100 mark before staging a modest rebound.

For retail investors, this sets up the classic question: is the sell-off just mechanical (due to insider unlocks), or is it signaling deeper cracks in CoreWeave’s growth story?

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Why Oversold Stocks Matter Now 💡

History shows that lock-up expirations often create short-term selling pressure, regardless of fundamentals. Insiders and early investors may want to take profits, causing sudden dips. But some of the market’s best rebound stories have started from these oversold moments.

For example:

Snowflake plunged after its lock-up expired in 2021 — only to recover strongly months later.

Palantir also faced a brutal unlock-driven dip but later found stability once supply normalized.

The key is distinguishing between temporary pressure and structural weakness.

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The CoreWeave Story 🔍

CoreWeave is no ordinary IPO — it’s a rising star in AI infrastructure with backing from Nvidia, arguably the most important player in the AI ecosystem. In Q2, it posted triple-digit revenue growth (up +206% YoY to $1.21B).

But there’s a catch:

Gross margins collapsed from 20% → 2%.

Heavy capex and operating costs raise questions on sustainability.

Profitability is still far off, which makes CoreWeave vulnerable to sentiment-driven swings.

So while growth is spectacular, the market is nervous about whether the economics can scale.

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Risks to Watch ⚠️

1. Unlock Pressure — With 84% of shares now tradable, we could see more selling from insiders or early backers.

2. Valuation Fragility — At ~$100, the stock still trades at a premium to other cloud/AI infrastructure peers.

3. Customer Concentration — A significant chunk of revenue ties back to OpenAI and a few large clients. Any slowdown there hurts fast.

4. Competition — Hyperscalers like Microsoft and Amazon may eventually build in-house capabilities, squeezing CoreWeave’s moat.

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Why Bulls Are Watching 🚀

Despite near-term chaos, bulls see three tailwinds:

AI Compute Demand — Demand for GPU clusters is still booming. CoreWeave is well positioned as a scaled player outside Big Tech.

Nvidia Connection — Its partnership gives CoreWeave credibility and access to scarce GPU supply.

Entry Point — Sub-$100 pricing could look attractive to investors who missed the IPO run-up.

> “Some of the best long-term entries happen when forced sellers hit the market.”

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Possible Scenarios (Next 6–12 Months) 📈📉

Bull Case: Lock-up selling clears, AI demand stays hot, margins recover → stock rebounds toward $130–$150.

Base Case: Shares stabilize around $90–110 as growth continues but margins remain pressured.

Bear Case: Insider selling intensifies, profitability stays elusive → stock breaks below $90 and struggles to regain momentum.

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Investor Takeaways ✅

For retail investors, the lesson isn’t just about CoreWeave — it’s about how to approach lock-up expirations in general:

Treat them as volatility events, not permanent verdicts.

Look for signs of stabilization in price and volume before entering.

Evaluate whether fundamentals justify jumping in, or if you’re just catching a falling knife.

Position size carefully — high-growth IPOs can swing hard in both directions.

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Your Turn: Debate Time 💬

Would you buy CoreWeave under $100, or wait for a clearer margin story?

Do you think insider unlocks are just noise — or a red flag that insiders want out?

Which other oversold AI stocks look more attractive to you right now?

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