CoreWeave cannot get enough Nvidia GPUs: why the stock still dropped 5%

CoreWeave cannot get enough Nvidia GPUs to satisfy its customers, but that was not enough to stop investors from selling the stock on Wednesday.

Shares of the AI cloud provider fell 4.9% to $94.94, reversing part of Tuesday’s 11.7% jump, while the Nasdaq lost 0.64%.

That captures Wall Street’s debate over CoreWeave. Demand remains exceptionally strong and pricing is improving, but capturing that demand requires tens of billions of dollars in GPUs, data centres and financing.

Every Nvidia GPU has a buyer

CoreWeave chief executive Michael Intrator told Yahoo Finance at Goldman Sachs’ Communacopia + Technology Conference that the company was “struggling to meet demand every day”.

“Every GPU we have could be sold to multiple different clients,” he said.

That scarcity is giving CoreWeave more pricing power.

Truist Securities analyst Arvind Ramnani raised his price target to $165 from $155 in August after CoreWeave increased pricing across its product lineup by 25% in July.

Ramnani said “pricing power is more than offsetting rising GPU costs”, with higher customer prices expected to flow clearly into margins during the second half of 2026.

CoreWeave’s second-quarter revenue backlog stood at about $104 billion, excluding more than $25 billion of commitments signed early in the third quarter.

Intrator also said Wednesday that the economics of newer infrastructure deals were improving because customer pricing was rising faster than costs for power, memory and other inputs.

That makes the selloff difficult to explain as evidence of weakening AI demand.

The bigger problem is the cost of keeping up

CoreWeave cannot convert that demand into revenue without continuously adding GPUs, power and data-centre capacity.

The company raised its 2026 capital-expenditure forecast to $35 billion-$39 billion from $31 billion-$35 billion. Second-quarter capex reached about $9.4 billion.

Bernstein captured the tension after CoreWeave’s latest results.

“This was the strongest print CRWV has delivered,” analysts said, according to Investing.com. But they added that while guidance increased across revenue, adjusted operating income, annualised run-rate revenue and active power, “capex went up higher than all of them”.

Bernstein raised its target to $74 from $67 but kept an Underperform rating, arguing that the company’s longer-term growth trajectory could still change quickly.

That explains why stronger demand does not translate into a higher stock price.

Every customer CoreWeave wants to serve creates another requirement for chips, infrastructure and financing. Revenue may arrive later, while much of the spending comes first.

Pricing power still has to outrun the debt

CoreWeave is also paying heavily to finance that expansion. Its recently arranged $2.6 billion delayed-draw term loan carries an estimated interest rate of about 8.2%-9.2%, higher than many investors expected.

Freedom Capital Markets analyst Paul Meeks nevertheless sees an upside.

“The bright side here is that shorter-term contracts are now pricing & repricing at much higher rates,” Meeks wrote, arguing that they can remain more profitable even with CoreWeave’s higher borrowing costs.

Freedom retained a Buy rating and $151 target.

The bull case is therefore straightforward: scarce Nvidia compute keeps customer pricing high enough for margins to improve faster than financing costs rise.

The bear case is equally clear. If AI capacity becomes less scarce, customer pricing weakens or borrowing remains expensive, CoreWeave could be left with a huge capital base that produces lower-than-expected returns.

Wednesday’s decline does not suggest customers have stopped wanting GPUs. Intrator’s comments point to the opposite.

The harder question is what happens after CoreWeave gets those GPUs.