The matter of CoreWeave (CRWV 1.62%), a concern currently occupying a rather precarious perch in the portfolios of certain gentlemen (and, I suspect, a few ladies with a penchant for the speculative), has been causing a degree of… unrest. The stock, you see, has been exhibiting a most tiresome habit of merely existing within a narrow band, as if tethered to the earth by an invisible, bureaucratic string. Optimism, once a bright, fluttering thing, has given way to whispers of softening demand for these… artificial intelligences, and the rather substantial sums required to keep the whole contraption from collapsing under its own weight.
Yet, should it break free from this tedious orbit, a tripling of its value is not entirely beyond the realm of possibility. A fanciful notion, perhaps, but one worthy of a moment’s consideration, even for the most hardened cynic. One must remember, after all, that fortunes are rarely built on prudence alone.
The Curious Case of CoreWeave
CoreWeave, you see, has dedicated itself to the construction of a cloud platform expressly tailored for the whims of these artificial intelligences. A noble endeavor, to be sure, though one that requires an astonishing amount of copper, silicon, and, naturally, capital. They boast a backlog of $55 billion, a figure that sounds impressive until one considers the sheer number of clerks required to keep track of it all. Each invoice a tiny monument to human inefficiency.
Fortified by the patronage of Nvidia – a company that seems to have cornered the market on digital thought – CoreWeave dares to compete with the behemoths of Amazon and Microsoft. A David facing two Goliaths, armed with a particularly powerful algorithm and a rather alarming amount of debt.
The cost of ambition, however, is proving… considerable. Some $6.25 billion has been expended on capital improvements in the first nine months of 2025 alone. An amount sufficient to pave a small principality in gold, or, more realistically, to keep a legion of electricians gainfully employed. This resulted in a negative free cash flow of $4.75 billion. A truly magnificent deficit. One might almost admire it, were it not for the nagging suspicion that it is unsustainable.
The company carries $14 billion in debt, a sum that seems to grow with each passing quarter. To fuel further expansion, they issued convertible notes, offering investors the right to purchase shares at a fixed price. A clever maneuver, perhaps, though one that reeks of desperation. The interest rate of 1.75% is, shall we say,… favorably low, especially when compared to the 9-15% levied on most of their existing obligations. It is as if they are attempting to bribe the market with promises of future prosperity.
Fortunately, these efforts have yielded a substantial increase in revenue. CoreWeave generated $3.56 billion in the first three quarters of 2025, a 204% increase over the previous year. Analysts predict a further 135% growth in 2026. Such figures are, admittedly, intoxicating. They suggest a company on the verge of something… remarkable. Or, perhaps, a spectacular implosion. Time, as always, will tell.
Currently, the stock trades at $86 per share. A tripling of this value would bring it to $258, significantly exceeding its previous high of $187. A tempting prospect, to be sure, but one that requires a degree of… faith. Or, perhaps, a reckless disregard for risk.
The market, it seems, is harboring concerns about the company’s finances, resulting in a price-to-sales ratio of 8. However, thanks to the aforementioned revenue growth, the forward P/S ratio stands at a more palatable 3.4. Considering that growth stocks often command P/S ratios in the teens and twenties, such a valuation is not entirely unreasonable. One might even call it… an opportunity. A small crack in the wall of skepticism, through which a shrewd investor might squeeze.
A Triple, Perhaps?
Given its current position, CoreWeave possesses a viable, albeit precarious, path to tripling in value. It requires, however, a willingness to overlook the substantial negative free cash flow and mounting debts. One must also accept the possibility that the entire edifice is built on sand.
Nevertheless, it is important to remember that this AI-specific cloud is valuable to its customers. The massive capital expenditures, while alarming, are reinvested into the company, fueling its growth. As it serves more customers, it should be able to reduce its negative free cash flows and ultimately turn them positive. Or, at least, that is the theory.
Even if the stock were to triple in value, its P/S ratio would remain in line with other growth stocks. Thus, investors could profit tremendously, provided they are willing to tolerate the risks involved in financing CoreWeave’s ambitious expansion. It is a gamble, to be sure, but one that might just pay off. Or, it might not. Such is the nature of speculation. One can only hope that, in the end, the rewards outweigh the risks. Though, in my experience, hope is often a most unreliable currency.
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2026-02-11 10:02