Approximately a 12% plunge, CoreWeave, which Duan Yongping bought the dip on, is turning into a bloody battlefield of bulls and bears.

Author: Deep Tide TechFlow

On May 8, AI cloud computing infrastructure provider CoreWeave (CRWV) plunged 11.4% in a single day, closing at $114.15. This is yet another “earnings-day decline” since the company’s IPO last March. But unlike previous downturns, this selloff is overlaid with a sharper contrast: Duan Yongping—widely known in the Chinese-speaking world as a Buffett disciple—had just initiated a first position in CoreWeave in Q4 2025, with a position of about $20 million. Based on the position size and the Q4 average price, the entry timing was close to CoreWeave’s lowest range of the year in December 2025.

CoreWeave is one of the most divisive AI assets in the U.S. stock market right now. On one side is the narrative of a nearly $100 billion order backlog, deeply tied to Nvidia—the “shovel-seller” story. On the other side is the financial reality that scaling up actually leads to bigger losses, along with insiders continuing to cash out. The Q1 earnings report acts like a prism, making this divergence especially clear.

Q1 earnings: Revenue doubles, but losses widen; Q2 guidance punctures the valuation

CoreWeave’s Q1 revenue was $2.08 billion, up 112% year-over-year and up 32% quarter-over-quarter, exceeding the LSEG market expectation of $1.97 billion. However, adjusted earnings per share showed a loss of $1.12, worse than the expected loss of $0.90. Net loss widened to $740 million, more than doubling from $315 million in the same period last year.

What truly sparked the selloff was the forward guidance. The company provided 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 full-year 2026 capital expenditures lower bound was raised from $30 billion to $31 billion. CFO Nitin Agrawal attributed the increase to rising prices of components.

The fragility of the profit structure is laid bare. CoreWeave’s Q1 adjusted EBITDA reached $1.16 billion (profit margin 56%), which looks impressive; but adjusted operating profit was only $21 million, and the operating margin was compressed to 1%. The reason is that technology and infrastructure costs surged 127% year-over-year to $1.27 billion, while sales and marketing expenses jumped more than 6 times year-over-year to $69 million. Revenue is rising—but costs rise faster.

During the earnings call, CEO Michael Intrator emphasized: “We have reached hyperscale.” He disclosed that the company currently has 10 customers committed to spending more than $1 billion. Compared with 2024, when 62% of revenue depended on a single customer, Microsoft, concentration risk has improved significantly. Intrator also expects CoreWeave’s annualized revenue to exceed $30 billion by the end of 2027.

Bullish narrative: A $100 billion order backlog, deeply tied to Nvidia

At the core of the bullish logic is order backlog. As of the end of Q1, CoreWeave’s remaining performance obligations (RPO) reached $99.4 billion. This represented a net quarter-over-quarter increase of about $33 billion, and was nearly 4x compared with the same period last year. Intrator said that in Q1 alone, new contracts signed exceeded $40 billion.

The customer roster is also reshaping market perception. In Q1, Anthropic was added as a customer, providing compute power for its Claude series models. CoreWeave signed a $2.1 billion AI cloud agreement with Meta. Trading firm Jane Street committed roughly $6 billion in orders and separately completed a $1 billion equity investment. Nvidia purchased an additional $2 billion of CoreWeave Class A common stock this quarter. As the world’s largest GPU supplier—and also an investor in CoreWeave and an important customer—Nvidia’s threefold relationship is described as Nvidia’s “favorite son.”

On financing structure, CoreWeave completed an $8.5 billion investment-grade HPC (high-performance computing) guaranteed delayed draw term loan (DDTL) in Q1, priced below 6%, which management called “innovative.” From the beginning of the year to date, the company has obtained more than $20 billion in debt and equity financing in total, and the weighted average cost of debt has fallen by about 80 basis points. In the same period, S&P Global Ratings upgraded CoreWeave’s credit outlook from “Stable” to “Positive.”

Bearish logic: The bigger the scale, the less profitable—and the debt snowball keeps growing

But another set of figures in the earnings report is creating anxiety. CoreWeave’s Q1 capital expenditures were $6.8 billion, and the company expects Q2 capital expenditures to further rise to $7 billion to $9 billion. The Q2 interest expense guidance range is $650 million to $730 million, reflecting the rapid expansion of its debt.

Total debt is already massive. As of the end of Q1, CoreWeave’s total debt is approximately $25 billion. Compared with the company’s current annualized revenue level, its leverage is significantly higher than that of traditional cloud service providers. Morgan Stanley data shows that CoreWeave’s 2025 debt financing is as high as about $11.8 billion, far exceeding equity financing of about $1.5 billion in the same period. The core expansion tool is the DDTL: a “sign orders first, then finance” model in which the company borrows from banks using order contracts as collateral to finance the purchase of GPUs.

The sharpest skepticism comes from profit quality. Although management repeatedly emphasized a 56% EBITDA profit margin, the adjusted operating margin is only 1%. After deducting technology and infrastructure costs, the “true” gross margin is about 4%, and both quarter-over-quarter and versus market expectations show compression. During the earnings call, Intrator attributed this to a stage effect of scale expansion: when the company rapidly expanded from a 1 GW operating scale, the dilution effect of the added capacity on profit margins was substantial. He promised this is the “profit margin trough,” and that margins will gradually rebound in future quarters.

But the market is currently unwilling to pay for this promise. Although analysts from Morgan Stanley and Jefferies offered positive comments, CoreWeave’s stock has seen a short-term pullback after each earnings release—this drop is one of the deepest among all such post-earnings declines.

Insiders continue selling, mirroring Duan Yongping’s bargain-hunting

Before and after the earnings release, CoreWeave insiders did not stop selling. CEO Mike Intrator sold 307,693 shares at the end of April. Co-founders Brian Venturo and Chen Goldberg also have records of selling. Institutional shareholder Magnetar Financial had already sold more than $300 million earlier. The latest disclosures show that a major shareholder recently sold about 1.2 million more shares again.

This sharply contrasts with Duan Yongping’s Q4 position-building. According to the 13F filing disclosed by H&H International Investment in February 2026, Duan Yongping first built a position in CoreWeave in Q4 2025—buying 299.9k shares—when the stock price had retreated by more than 65% from its peak. At that time, market concerns about the company’s liability structure reached their highest point.

Notably, CoreWeave accounts for only 0.12% of Duan Yongping’s total holdings at H&H, indicating a “light position” meant to test the waters. In the same period, Duan Yongping aggressively increased his Nvidia holdings by over 1110%, and also initiated positions in Credo Technology (high-speed interconnect) and Tempus AI (AI healthcare). The three new AI positions combined accounted for less than 0.3%. This suggests that Duan Yongping’s real heavy bet is on Nvidia itself, while CoreWeave looks more like a small downstream extension in the AI compute industry chain.

The key question now: A turning point or a trap?

During the Q&A portion of the call, Intrator threw out a highly emotional counterquestion: “I’ve always felt that everyone is staring at the tree of the stock price, missing the whole forest.”

This line neatly captures the current standoff between bulls and bears. The bulls see the forest as nearly a $100 billion contract reserve, a diversified customer base, Nvidia’s triple binding, and an upgraded credit rating. The bears see the tree as a 1% operating profit margin, widening net losses, aggressive capital expenditures, and continuous insider selling.

CoreWeave’s share price has still risen nearly 80% since the beginning of the year, and is up more than 200% since its IPO. But when a stock’s bull case is built on forward-looking narratives, while the bear case is built on current figures, every earnings report becomes a battleground for these two narratives. In an earlier interview with Fang Sanwen, Duan Yongping said: “AI is a massive revolution brought about by a qualitative change in compute power, with impacts that may or may not surpass the internet and industrial revolutions. The AI bubble is obvious right now; 90% of companies may be eliminated, but the ones that survive will become the next generation of giants.” His 0.12% light position already acknowledges the uncertainty of this gamble.

The next test point is already clear: the Q2 earnings report. If operating profit margins do not rebound as management promises at that time, the credibility of the “forest” narrative will face a real stress test.

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