CoreWeave stock jumps after major Nvidia Rubin news: what next?

CoreWeave NASDAQ:CRWV stock price jumped to $120, its highest point since May 8, as investors cheered the latest news from Taiwan, where Nvidia launched several products. CRWV has soared by nearly 82% from its lowest point this year. It has formed a double-bottom pattern, pointing to more gains.

CoreWeave stock jumps as it validates Vera Rubin NVL72

CoreWeave, a company that Nvidia owns a 11% stake in, announced that its Essential Cloud for AI, launched NVIDIA Vera Rubin NVL72 on its CoreWeave cloud. This addition leverages its purpose-built software and engineering solutions to bring up Vera Rubin.

The solution is made up of 72 NVIDIA Rubin GPUs and 36 NVIDIA Vera CPUs per rack and is connected through 260 TB/s NVIDIA NVLINK 6th-generation fabric. According to its testing, it delivers up to 10x better performance per watt, up to one-fourth fewer GPUs, and lower costs NVIDIA Blackwell. In a statement, Craig Falls, the head of Quantitative Research at Jane Street, said:

"Their ability to deliver highly performant clusters with full cluster observability and a support team that engages deeply on hard problems gives us the confidence to partner with them on Vera Rubin.”

CoreWeave growth is accelerating

The new announcement came at a time when CoreWeave’s business is firing on all cylinders, a trend that analysts believe will continue. Its most recent results showed that its revenue backlog jumped to nearly $100 billion as it inked some major deals with companies like Meta Platforms, Anthropic, and OpenAI.

Its revenue soared from $982 million in the first quarter of last year to $2.078 billion in Q1 of this one. Most importantly, analysts believe that this growth will continue, with its annual revenue expected by 146% to $12 billion. This revenue is expected to hit $24.9 billion next year.

This growth will likely continue as the artificial intelligence boom accelerates, with the top hyperscalers pledging spending over $750 billion this year. Some of these funds will go to neocloud companies, including CoreWeave. 

Still, the company is facing major challenges. For example, the company continues to experience substantial depreciation, which jumped to over $1.14 billion from $443 million in the same period last year. Its depreciation was over 50% of its revenue. 

CoreWeave’s debt has also continued rising as the company predicts that it will spend between $30 billion and $35 billion in capital expenditure. Its short-term debt jumped to over $7.5 billion, while its long-term debt rose to over $17 billion. This explains why investors continue shorting the CRWV stock.

CRWV stock price technical analysis

CoreWeave stock chart | Source: TradingView

The daily chart shows that the CoreWeave stock formed a double-bottom pattern at $55.85, its lowest point in December last year and March 26. This pattern has a neckline of $114.30, its highest in January this year.

The stock has moved above the 50% Fibonacci Retracement. It also jumped above the 50-day Exponential Moving Average (EMA), a sign that bulls have prevailed. 

Therefore, the stock will likely continue rising as bulls target the key resistance level at $138, its highest point in May. A move above that level will point to more gains, potentially to the psychological level at $150.