How To Play Hot Stocks, CoreWeave (CRWV) Edition - The Cestrian Circle Newsletter
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Read This Even If You Don’t Care About CoreWeave
by Alex King, CEO, Cestrian Capital Research, Inc.
CoreWeave is, at present, a terrible business but a red hot stock. It might, one day, become a good business, no-one knows, but right now it has the following unappealing characteristics:
- Revenue growth is slowing
- Operating margins are falling
- The balance sheet worsens every quarter
- The share count is rising inexorably
None of which is apparent from this:
Nor from this:
So, faced with a terrible business that is making billionaires out of whippersnappers, what should you do?
We explore this below. You can read this note if you are a paying Cestrian Circle or Cestrian Inner Circle subscriber. If you hit a paywall, we invite you to join one of these membership tiers.
First, we’ll review what CoreWeave does and why it is so popular right now. (It’s so popular that it just raised fully $1bn in new equity from Jane Street). We’ll then assess CoreWeave fundamentals with a completely cold take unswayed by the social media noise around the name. Finally we’ll consider its stock price performance and the upside & downside risks.