Is CoreWeave a Buy, Sell, or Hold Before Aug. 13?

Core Viewpoints - CoreWeave's IPO was undersubscribed and priced below its target at $40, with Nvidia providing support [1] - The stock experienced significant volatility, peaking with a gain of over 300% before falling more than a third due to valuation concerns [2] - The company is seen as a battleground stock with strong arguments for buying, selling, or holding ahead of its earnings report [3] Buy Arguments - CoreWeave's revenue surged by 420% to $981.6 million, indicating strong demand for AI computing power [4] - The company has secured substantial financial backing, including a $1.75 billion debt offering and a $2.6 billion debt facility, enhancing its capacity for expansion [6] - CoreWeave's customer base includes major AI players like OpenAI, Microsoft, Meta Platforms, and Alphabet, which supports its growth potential [7] Sell Arguments - CoreWeave is currently unprofitable, with operating losses of $27.5 million and significant interest expenses of $263.8 million on nearly $9 billion in debt [8] - The company's business model relies on continuously updating data centers with new GPUs, posing a risk of financial strain [9] - The 9% interest rate on its latest debt indicates that lenders view the company as a high-risk borrower [9] Hold Arguments - The macroeconomic environment and semiconductor industry issues complicate the assessment of CoreWeave's valuation [10] - Investors may benefit from waiting for more clarity on the company's prospects after additional earnings reports [11] - Holding CoreWeave may be prudent given its volatility and potential for future growth if it can manage its losses [12]