1. Is the Stock Oversold on Lock-Up Expiration News?
Lock-Up Details & Market Reaction
The lock-up is set to expire after market close on Friday, August 15, 2025, freeing up approximately 83–84% of Class A shares for sale .
CoreWeave has experienced steep losses: shares plunged 18% after earnings, down from a high of around $121–122 . Early Thursday trading saw an additional ~10% decline as the market digested lock-up risk .
Historical Post-Lock-Up Patterns
Historically, IPOs tend to hold relatively steady immediately after lock-up expiration; average first-day moves are minimal .
Over a one-month horizon, stocks typically decline around 2.4%, although for large-cap firms (like CoreWeave, now with a market cap near $57B) the average is more modest—around 0.5% .
Analyst Stance
Most analysts maintain neutral or hold ratings. For instance, MoffettNathanson’s Nick Del Deo holds a Neutral view, citing uncertainty around insider selling .
Wells Fargo targets up to $105, Arete at $130, while others like Jefferies, Northland, and Macquarie span $51 to $165, with an average consensus near $100 .
MarketBeat notes a consensus “Hold” rating and average price target of roughly $99.80 .
Verdict on Oversold?
CoreWeave’s sharp decline largely reflects a combination of heavy earnings-related disappointment, bloated CapEx, and lock-up risk exposure. While the stock is materially lower, recent movement appears more reactionary than fundamentally justified. Given the upcoming dilution pressure, it's premature to deem it oversold in traditional terms. Instead, it looks more like a gradual recalibration to underlying risks.
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2. Is It a Buy Under $100?
Arguments in Favor
Valuation Reset: Slashed from above $120 to now under $100—potentially more reflective of current risks.
Robust Revenue Growth: Q2 revenue surged to ~$1.2 billion, tripling year-over-year .
Strong AI Backlog & Partnerships: Backlog grew significantly; partnerships with Nvidia, Microsoft, OpenAI continue to drive demand .
Two Potential Buying Windows: Analysts suggest opportunities both post-earnings dip and post-lock-up stabilization as possible entry points .
Cautionary Factors
Heavy Debt & CapEx: Q2 CapEx was exceptionally high; full-year projections of $20–23 billion raise sustainability concerns. This adds pressure on operating margins and cash flow .
Debt Burden: CoreWeave may require up to $10 billion in additional debt, and interest expenses already exceed operating income .
Dilution & Insider Selling: The lock-up expiration could introduce substantial selling—especially if insiders exit .
Diverging Analyst Targets: Downside targets include $36 (D.A. Davidson), moderate $56 (MoffettNathanson), while bullish targets go up to $135+ .
Conclusion
For investors with high risk tolerance and a bullish outlook on AI infrastructure, buying under $100 may offer upside, especially if demand and backlog hold up.
Nevertheless, given debt concerns, CapEx scale, and dilution risk, it's prudent to approach with staggered entries, possibly waiting for short-term volatility to subside post lock-up.
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3. Summary Table: Considerations for Buying Under $100
Factor Assessment
Revenue & Demand Very strong — AI backlog & growth remain key tailwinds
Valuation Adjustment Recent decline may reflect some of the risks—but not all
Debt & CapEx Significant — elevated financial risk remains
Lock-Up Expiry Adds immediate uncertainty; may need time to stabilize
Analyst Opinions Wide-ranging — from $36 to $165 targets; consensus near $100, “Hold”
Entry Strategy Staggered, selective buying preferred; not a blind dip buy
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Final Thoughts
CoreWeave is not indisputably oversold given the legitimate structural and financial challenges it faces. Buying under $100 might reward long-term believers in AI infrastructure—but only if you're comfortable with high operational risk, heavy leverage, and near-term volatility stemming from the lock-up and earnings readjustment.
A prudent approach: consider a partial entry or scaling in, especially after market settles post-lock-up, while watching closely for signs of insider selling and actual demand sustainment.
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