Down 50% From Its High, Is CoreWeave a Bargain or a Value Trap?

CoreWeave has dropped 50% from its post-IPO peak following its April 2025 debut, pressured by reports that major customer Meta is building out proprietary cloud infrastructure to support its AI workloads. The neocloud provider, which specializes in AI-focused cloud computing, now trades at 7.1x sales despite projecting 147% revenue growth this year and 98% next year.

The company remains unprofitable as it pours capital into capacity expansion, and analysts at The Motley Fool note profitability is still years away. The Meta exposure creates concentration risk: if the social media giant shifts more workload in-house, CoreWeave's growth trajectory faces material downside. The valuation discount reflects both the execution risk tied to achieving aggressive growth targets while burning cash and the client-retention uncertainty as hyperscalers increasingly build proprietary infrastructure.

The stock sits at a crossroads between a discounted entry into an AI infrastructure play and a value trap dependent on client stickiness in a market where the largest buyers are also competitors.