Citi's Tyler Radke shares his outlook on CoreWeave's stock after a two-day slide

Market Concerns & Risks - CoreWeave stock is experiencing downgrades due to analyst concerns about near-term overhang following the announcement of acquiring Core Scientific [1] - City places CoreWeave on a 90-day downside catalyst watch due to lockup expirations, with approximately 85% of class A shares becoming available next month [1][2] - The all-stock deal for Core Scientific reveals a 30% spread, indicating high borrow costs rather than uncertainty about the deal closing [3][4] - Options market suggests a forward price of $120 for CoreWeave in October, raising concerns given the stock's 4x increase since its IPO and the all-stock deal at a near-term peak [5] - Potential slowdown in demand and rapid upgrade cycles from Nvidia (Hopper, Blackwell, Reuben) could pose problems for companies heavily invested in AI chips [6] CoreWeave & Core Scientific Acquisition - CoreWeave's acquisition of Core Scientific involves shutting down and repurposing some of Core Scientific's infrastructure, including Bitcoin mining operations [11][12] - The acquisition provides CoreWeave with approximately 2 gigawatts of incremental power, considered a good deal if synergies are realized [11] - The acquisition is viewed as a play to increase CoreWeave's share in the AI hyperscaler market, but carries execution risk [12] AI Market & CoreWeave's Position - Industry fundamentals are positive in the near term, with revenue forecasts increasing due to large contracts, such as a $30 billion annual deal from Oracle [7] - CoreWeave is heavily leveraged to the AI data center build, making it more susceptible to near-term disruptions like chipset delays or slowdowns in demand [8][9] - Long-term concerns exist regarding depreciation accounting and rising competition, with CoreWeave viewed more as a data center provider than a true software company [9]