TLDR
- CoreWeave stock dropped 14% Wednesday and a further 5.5% Thursday, falling to $80.97
- A Bloomberg report said Meta Platforms may launch a cloud business to sell excess AI computing power to third parties
- Meta is currently one of CoreWeave’s biggest customers
- SoftBank also announced plans to enter the U.S. AI cloud market under the name SB Neo
- Rosenblatt Securities maintained its Buy rating and $250 price target, calling the selloff a buying opportunity
CoreWeave (CRWV) stock has taken a beating this week. The AI cloud company fell 14% on Wednesday and dropped another 5.5% on Thursday to close at $80.97, wiping out over $7.5 billion in market value across two sessions.
CoreWeave, Inc. Class A Common Stock, CRWV
The trigger was a Bloomberg report that Meta Platforms is exploring a plan to sell excess AI computing power to outside companies — effectively entering the neocloud market where CoreWeave operates.
The timing stings. Meta is one of CoreWeave’s largest customers, meaning the company is watching a key revenue partner potentially morph into a competitor.
CoreWeave pushed back on the narrative. “We’re continuing to see incredibly strong demand across a growing and increasingly diverse customer base, including Meta who is a great customer and partner of CoreWeave’s,” the company said in a statement.
It also added that it sees the broader AI investment wave as “a rapidly expanding market, not a zero-sum game.”
Fellow neocloud Nebius also sold off on the Meta news, suggesting the market sees this as a sector-wide concern, not just a CoreWeave problem.
Rosenblatt Sees a Different Story
Not everyone is running for the exits. Rosenblatt Securities analysts John McPeake and Tanu Chauhan said Wednesday night that the selloff “presents a buying opportunity.”
Their note pointed to continued strong demand for GPU compute, with shortages still the norm across the industry. They also raised a key legal point — that Meta likely does not have the right to resell capacity it has leased from CoreWeave through 2032 to third parties.
Rosenblatt kept its Buy rating and held its $250 price target, which would represent upside of around 209% from current levels.
The broader analyst picture is more mixed. Of 35 analysts covering the stock, 21 have a Buy rating, 12 a Hold, and 2 a Sell. The consensus price target sits at $135, roughly 58% above current trading levels.
SoftBank Adds More Noise
Adding to the pressure on Thursday, SoftBank announced it plans to launch its own AI cloud business in the U.S., tentatively called SB Neo. That’s another potential new entrant in the market CoreWeave has been building in.
CoreWeave stock is now up just 13% year-to-date but is down 51% over the past 12 months. The stock has a 52-week range of $63.80 to $166.22.
The company’s last earnings report, posted May 7, showed revenue of $2.08 billion — up 111.6% year over year. But it missed on the bottom line, posting a loss of $1.40 per share against an expected loss of $1.17.
Insider selling has also been a watch item. Over the past 90 days, insiders have sold over 26.5 million shares worth more than $3 billion.
On the institutional side, Vanguard increased its position by 275.6% in Q4, picking up an additional 20.4 million shares.
CoreWeave stock opened Thursday at $85.68, with a market cap of $38.35 billion.
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