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$CoreWeave(CRWV.US)$ It has become a hot topic in the market recently. Especially after last month's performance, which fell short of expectations and was followed by a large number of stock unlocks, the stock price experienced a significant decline, dropping to a low of $85.26. Currently, the stock price has slightly rebounded, prompting many to question whether it is still a good time to invest and, if so, how to proceed. Today, we will discuss this in detail.

What kind of company is this? What are its advantages and risks?

$CoreWeave(CRWV.US)$ Previously focused on cryptocurrency mining, it has now successfully transformed into a provider of AI cloud computing services. In simple terms, it is now the 'super landlord' of the AI era, specializing in packaging top-tier AI computing power, such as NVIDIA's most advanced graphics cards, into services that are rented out to companies engaged in AI.

From the perspective of the entire AI industry, it is currently in the early stages of an explosion. The Chief Financial Officer of NVIDIA stated that by 2030, global spending on artificial intelligence infrastructure will reach $3 to $4 trillion. Considering the estimated capital expenditures of the world's four major cloud service providers (Meta, Microsoft, Amazon, Google) of approximately $600 billion in 2025, it is highly likely that this will multiply several times in the next five years.

In terms of AI cloud services, CoreWeave has significant advantages. It is backed by NVIDIA's GPU resources, allowing it to access NVIDIA's top-tier chips first; it holds long-term large orders from major clients such as OpenAI, Microsoft, and Google, with over $30 billion in orders yet to be fulfilled, indicating a strong business outlook based on the current order situation.

In terms of product technology, in addition to the latest product supply from NVIDIA, it focuses on AI and high-performance computing. This differs from traditional public cloud providers that need to accommodate various workloads. This "dedicated runway" allows it to achieve lower latency, higher performance, superior efficiency, and more competitive pricing when running AI tasks.

As a result of these factors, its business is experiencing rapid growth. Revenue soared from $15.83 million in 2022 to $1.915 billion in 2024, representing a compound annual growth rate of over 1000%. In Q2 2025, revenue reached $1.213 billion, an impressive year-on-year increase of 206.75%, far exceeding market expectations.

Revenue for 2025 is projected to be around $5 billion, with mainstream market analysts estimating its revenue range for 2026 to be approximately $10-12 billion, potentially doubling compared to 2025.

Of course, its risks are evident, and the market's most significant concern lies with its financial condition.

Net losses continue (with a net loss of $291 million in Q2 2025), free cash flow remains negative (at -$2.704 billion in Q2 2025), and the debt-to-asset ratio is very high (85.44% in Q2 2025), necessitating reliance on external financing to support expansion. Furthermore, newly constructed data centers will not gradually come online until the end of 2025, with no current return on investment, resulting in significant cash outflows that could exert pressure on the stock price in the short term.

There are also controversies regarding its valuation. As of September 2, prior to the opening of U.S. stock markets, the price-to-sales ratio stood at 14.28, still above that of traditional software companies, reflecting high market expectations. While CoreWeave has growth potential, its financial risks cast a shadow of uncertainty over its current valuation.

At the same time, increased competition must be watched closely. The AI industry is highly competitive, with strong competitors like Amazon AWS, Microsoft Azure, and Google Cloud. Recent moves by these companies, such as AWS launching GPU rental packages specifically for large model training at prices lower than independent service providers, and Microsoft bundling AI training with its Azure cloud services, could pressure CoreWeave. In such an environment, reliance on NVIDIA and a high customer concentration could lead to adverse developments.

In summary, CoreWeave currently holds a first-mover advantage in the AI cloud infrastructure sector, with strengths in supply, customer base, and technology. Its revenue growth is rapid and the industry outlook is broad; however, persistent losses, high debt levels, elevated valuations, and intensifying competition are risks that warrant caution.

Next, let's discuss this issue: is it a good time to enter the market now?

The only rule for making money in stocks is to successfully buy at a lower price and sell at a higher price.

So, is it really a good time now? We can conduct some valuation calculations and examine the signals from technical analysis, market liquidity, and options, using data from before the U.S. stock market opened on September 2.

In terms of valuation, for instance, using the formula "Price-to-Sales Ratio = Total Market Capitalization / Revenue", we can assume a fixed price-to-sales ratio value to predict a revenue figure for 2026, thus calculating the total market capitalization for 2026 and dividing it by the total number of shares to estimate the stock price.

If we calculate based on the current price-to-sales ratio of approximately 15, assuming the revenue for 2026 reaches 10 billion USD, then the total market capitalization would be approximately 150 billion USD. Based on the current total share count of 489 million, the estimated stock price would be around 307 USD. Conversely, if the revenue for 2026 is 5 billion USD, the estimated stock price would be approximately 153 USD.

If we calculate using a lower price-to-sales ratio of 8, assuming the revenue for 2026 remains at 10 billion USD, the corresponding stock price would then be approximately 164 USD. If the revenue is estimated at 5 billion USD, the stock price would be approximately 82 USD.

Therefore, determining whether the current price is cheap largely depends on how you anticipate future revenues and valuation multiples.

In terms of technical indicators, the overall picture shows a strong short-term momentum, but caution should be exercised regarding the risk of a pullback. Specifically:

In recent trading days, the MACD histogram has shifted from negative to positive, forming a golden cross signal, indicating that short-term upward momentum has strengthened. The KDJ lines are diverging upwards, reflecting an increase in short-term buying power; however, the J value has exceeded 100, suggesting that the short-term price increase may be too rapid, potentially facing profit-taking pressure or a need for technical correction.

The stock price has surpassed the 5-day (97.31) and 10-day moving averages (95.25), indicating a resurgence of short-term buying power. However, it remains below the 20-day moving average (106.85), suggesting that the medium-term trend has not yet fully reversed. The market may be in a phase of oscillation recovery characterized by 'pressure above and support below,' and may require more time or volume support to confirm a trend reversal. If trading volume continues to expand, a breakout may occur; if volume contracts, a pullback risk may arise. The value of the 20-day moving average serves as an observation point.

In terms of capital, short-term discrepancies still exist. For example, on August 28, there was an inflow of 135 million yuan, while on August 29, there was a net outflow of approximately 11.88 million yuan. Next, let's discuss the signals from the options market.

$CoreWeave(CRWV.US)$ The implied volatility (IV) has decreased following the earnings report, currently standing at 72.65%, which is at a historical low, far below the historical volatility (HV) of the past 30 days. This indicates that the maximum uncertainty in the short term has been alleviated, and the market anticipates a relatively stable trend ahead without significant fluctuations. Additionally, the relatively low IV is more favorable for option buyers.

The ratio of put to call option trading volume has retreated from the high levels post-earnings, currently at 0.52, indicating that short-term bearish or hedging sentiment has rapidly dissipated. The current market sentiment leans towards bullishness, suggesting that while the overall market structure is more bullish, bearish positions are continuing to increase, with investors preparing for potential downside risks while remaining optimistic.

The ratio of put to call option open interest shows a relatively robust upward trend, currently at 0.64. Based on the distribution of option trading volume and open interest, call options are also dominating overall.

The recent top large orders in options over the past 10 days indicate that bullish sentiment is generally stronger, with significantly more call trades. Call strike prices are concentrated between $80-107 and $165-180 for January to March next year. Put strike prices vary between $55-94.

In summary, the signals from the options market indicate that short-term trading sentiment has turned positive, but investors are also quietly building downside protection, betting on upward movements while purchasing insurance. The market demonstrates a cautiously optimistic attitude, with long-term bullish sentiment becoming more pronounced, as long-term capital awaits further breakthroughs.

Based on the information above, in terms of stock investment, long-term investors may consider building positions in batches, while medium- to short-term investors can wait for a pullback to support levels before considering entry.

Aside from stocks, how can options on CoreWeave be played?

Today, I will mainly discuss options strategies that can be considered in the context of having$CoreWeave(CRWV.US)$ stock holdings — the Long Collar options strategy.

1. Strategy Objective: To provide downside protection in an uncertain market environment while allowing for limited gains when stock prices rise, suitable for highly volatile stocks like CoreWeave.

2. Strategy Composition: "Hold the underlying stock" + "Buy Put A" + "Sell Call B." The Call and Put have different strike prices but share the same expiration date and quantity, and the number of options corresponds to the number of shares held. For example, in the case of holding 100 shares of CoreWeave:

● Sell: 1 Call option with a strike price of $150 and expiration date of 12/25/19, receiving a premium of approximately $550; since the stock is held, the margin requirement is reduced, so it will not occupy additional capital.

● Buy: 1 Put option with a strike price of $75 and expiration date of 12/25/19, paying a premium of approximately $589.

Overall: The net cost is several tens of dollars, with the possibility that this cost may not be recoverable; however, the overall cost is manageable.

3. What is the effect of the strategy?

1) If the stock price exceeds $150 during the period, there is a possibility of being exercised, requiring the sale of the stock at $150. Therefore, the potential profit from further stock price increases would be lost. Thus, the price of this Call option can be set as your target selling price. However, even if the stock price exceeds $150 before expiration, there is still a significant probability that it will not be exercised.

Additionally, at this time, the Put option still holds some value, and one might consider closing the position or waiting for a price rebound during a pullback to close the position, although there is also the possibility that it will not rebound.

2) If the stock price falls below $75 during the period, and if the time value has not been significantly eroded, the price of the Put option may become quite high, at which point one could consider closing the Put position to realize some profit.

At this time, the price of the Call option should have decreased significantly, and one might consider buying to close the position, thereby pocketing most of the premium received from selling the Call option. Both sides of the options can be profitable.

However, the stocks held at this time may incur losses, necessitating a wait for a rebound, or if a rebound seems unlikely, one may execute a stop-loss on the stocks. The profits from both options can offset some of the stock losses.

3) If the stock price remains between $75 and $150 during the period, the prices of options at both ends will continue to fluctuate, and one could consider closing the positions under conditions that yield considerable profit.

Once the options have been closed, and individual stocks are still held, the strategy can continue to be rolled over.

That's all for today. If you have any thoughts or suggestions regarding CoreWeave's investment strategy, please feel free to leave us a message!

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Brian Wong

Futu Investment Strategy Expert

CE: BBH085

(The author is a licensed person under the Securities and Futures Commission, and neither he nor his associates have any financial interest in the shares of the recommended issuer)