This Glorious Growth Stock Is Down 60%. Here's Why You Should Buy It Hand Over Fist.

Core Viewpoint - CoreWeave's fourth-quarter 2025 results disappointed investors, leading to a significant stock decline, trading 60% below its 52-week high [1][2] Financial Performance - CoreWeave's revenue for 2025 increased by 168% year over year to $5.1 billion, but the company reported a substantial adjusted net loss of $606 million, nearly tenfold from the previous year [5] - The company’s capital expenditures reached $14.9 billion in 2025, with Q4 expenditures alone at $8.2 billion, a 242% increase from the same period last year [5] Market Position and Demand - The demand for AI-focused cloud computing is surging, with Goldman Sachs predicting a shortfall of 9 gigawatts in U.S. data center power capacity by 2026, increasing to 10 gigawatts in subsequent years [7] - CoreWeave has established a strong customer base, including major hyperscalers and AI companies, resulting in a revenue backlog of $67 billion, up from $15.1 billion at the end of 2024 [8] Future Outlook - CoreWeave plans to spend $30 billion to $35 billion in capital expenditures in 2026, significantly higher than the anticipated revenue of $12 billion to $13 billion for the year [9] - The company expects to exit 2026 with an annualized run rate revenue of $17 billion to $19 billion and over $30 billion by the end of 2027 [10] - Long-term adjusted operating margins are projected to reach between 25% and 30%, up from 13% last year [11] Cost Management - CoreWeave reduced its weighted average interest rate by 300 basis points last quarter, saving $700 million in annualized interest, and aims to further lower capital costs through partnerships with financial institutions [12] Investment Considerations - Although CoreWeave is not yet profitable, its sales multiple of 6.6 is lower than the U.S. technology sector average of 8.3, suggesting potential for higher valuation [14] - If the company achieves projected earnings of $2.86 per share in 2028 and trades at 32 times earnings, the stock could rise to $91, indicating a potential 23% increase from current levels [15][16]