Author: Deep Tide TechFlow

On May 8th, AI cloud computing power provider CoreWeave (CRWV) experienced a single-day plunge of 11.4%, closing at $114.15. This marks the company's second consecutive day of declining earnings since its IPO last March. However, unlike previous declines, this one is accompanied by a more dramatic contrast: Duan Yongping, widely known in Chinese-speaking circles as a disciple of Warren Buffett, recently initiated his first investment in CoreWeave in the fourth quarter of 2025, with a position of approximately $20 million. Based on the position size and the average price in the fourth quarter, the timing of this investment is close to CoreWeave's lowest point this year, in December 2025.

CoreWeave is one of the most divisive AI assets in the US stock market right now. On one hand, there's its nearly $100 billion order backlog and its deep integration with Nvidia, making it a "shovel seller" narrative; on the other hand, there's the financial reality of increasing losses despite expansion, and insider cashing out continuously. The Q1 earnings report acts like a prism, reflecting this divergence with exceptional clarity.

Q1 Financial Report: Revenue Doubled but Losses Widened; Q2 Guidance Pierces Valuation

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

What truly triggered the sell-off was the forward guidance. The company gave 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. At the same time, the lower limit of capital expenditure for the full year 2026 was raised from $30 billion to $31 billion, with CFO Nitin Agrawal attributing the reason to rising component prices.

The fragility of the profit structure was laid bare. Q1 adjusted EBITDA reached $1.16 billion (56% profit margin), seemingly impressive; however, adjusted operating profit was only $21 million, with the operating profit margin compressed to 1%. This was due to a 127% year-on-year surge in technology and infrastructure costs to $1.27 billion, and a more than sixfold increase in sales and marketing expenses to $69 million. Revenue was rising, but costs were rising even faster.

During the conference call, CEO Michael Intrator emphasized, "We have reached hyperscale." He disclosed that the company currently has 10 customers who have committed to spending over $1 billion, a significant improvement in concentration risk compared to 62% of its revenue relying on a single customer, Microsoft, in 2024. Intrator also expects CoreWeave's annualized revenue to exceed $30 billion by the end of 2027.

Multiple narratives: A $100 billion order, deeply tied to Nvidia

The core of the bullish logic is the order backlog. As of the end of Q1, CoreWeave's contract backlog (RPO) reached $99.4 billion, a net increase of approximately $33 billion quarter-over-quarter and nearly quadrupling year-over-year. Intrator stated that new contracts signed in Q1 alone exceeded $40 billion.

The customer base is also reshaping market perception. In Q1, Nvidia added Anthropic as a customer, providing computing power support for its Claude series models; signed a $2.1 billion AI cloud agreement with Meta; and dealmaker Jane Street committed approximately $6 billion in orders and completed a separate $1 billion equity investment. Nvidia also purchased another $2 billion in Class A common stock of CoreWeave this quarter. This global largest GPU supplier is also an investor and a major customer of CoreWeave; this triple relationship has led to Nvidia being referred to as its "own child."

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

The bearish logic is: the larger the scale, the less profitable it becomes, and the debt snowball keeps getting bigger.

However, another set of figures in the financial report is causing anxiety. Q1 capital expenditures reached $6.8 billion, and the company expects Q2 capital expenditures to further climb to $7 billion to $9 billion. Q2 interest expense guidance is between $650 million and $730 million, reflecting the rapid expansion of debt.

The total debt is already staggering. As of the end of Q1, CoreWeave's total debt was approximately $25 billion. This figure represents a leverage level significantly higher than that of traditional cloud service providers relative to the company's current annualized revenue. Morgan Stanley data shows that CoreWeave's debt financing is projected to reach approximately $11.8 billion in 2025, far exceeding its equity financing of approximately $1.5 billion during the same period. The company's core expansion tool is DDTL, a "sign-first, then finance" model that uses order contracts as collateral to obtain bank financing for the purchase of GPUs.

The most pointed criticism comes from the quality of profits. Despite management repeatedly emphasizing a 56% EBITDA margin, the adjusted operating margin is only 1%, and the "true" gross margin, excluding technology and infrastructure costs, is approximately 4%, both sequentially and according to market expectations. The intrator attributed this to the phased effect of scale expansion during the conference call; when the company rapidly expands from a 1-gigawatt operating scale, the dilution effect on profit margins from new capacity is significant. He promised that this is a "margin low" and that it will gradually rebound in future quarters.

However, the market is currently unwilling to pay for this promise. Although analysts at Morgan Stanley and Jefferies gave positive reviews, CoreWeave has experienced short-term pullbacks after each earnings report in the past, and this drop is the deepest it has ever been after an earnings report.

Insiders continue to sell off their shares, mirroring Duan Yongping's bottom-fishing strategy.

Before and after the earnings release, CoreWeave insiders continued selling. CEO Mike Intrator sold 307,693 shares at the end of April; co-founders Brian Venturo and Chen Goldberg also made sales; institutional shareholder Magnetar Financial had previously sold over $300 million worth of shares. The latest disclosure shows that a major shareholder recently sold approximately 1.2 million shares again.

This contrasts sharply with Duan Yongping's position-building activities in the fourth quarter. According to the 13F filing disclosed by H&H International Investment in February 2026, Duan Yongping first established a position of 299,900 shares in CoreWeave in the fourth quarter of 2025, when the company's stock price had fallen by more than 65% from its peak, and market concerns about its debt structure reached their peak.

It's worth noting that CoreWeave only accounts for 0.12% of Duan Yongping's total H&H holdings, representing a "small, trial-and-error" position. During the same period, Duan Yongping significantly increased his holdings in Nvidia by over 1110%, and established new positions in Credo Technology (high-speed interconnect) and Tempus AI (AI healthcare). These three new AI positions combined account for less than 0.3% of his total portfolio. This suggests that Duan Yongping's real focus is on Nvidia itself, while CoreWeave appears to be a smaller-scale extension into the downstream of the AI ​​computing power industry chain.

The critical question at hand: Inflection point or trap?

During the Q&A session of the conference call, the intrator posed a rather emotional retort: ​​"I've always felt that everyone is focused on the stock price tree and missing the whole forest."

This statement perfectly encapsulates the current standoff between bulls and bears. The bulls see a forest of nearly $100 billion in contract reserves, a diversified customer base, Nvidia's triple partnership, and credit rating upgrades; the bears see trees of a 1% operating profit margin, widening net losses, aggressive capital expenditures, and insider selling.

CoreWeave's stock price is still up nearly 80% year-to-date and has risen over 200% since its IPO. However, when a stock's bullish narrative is based on long-term prospects while its bearish narrative is based on current figures, every earnings report becomes a battleground between these two narratives. Duan Yongping previously stated in an interview with Fang Sanwen: "AI is a massive revolution brought about by a qualitative leap in computing power, with an impact that may surpass the internet and industrial revolutions. Currently, there is a clear AI bubble; 90% of companies may be eliminated, but those that survive will become the next generation of giants." His 0.12% small position itself acknowledges the uncertainty of this gamble.

The next crucial test is clear: the Q2 financial report. If the operating profit margin fails to rebound as management has promised, the credibility of the "forest" narrative will face a real stress test.