CoreWeave stock drops after earnings

CoreWeave's stock dropped 38 percent after its Q2 results, with rising expenses and lockup expiration adding to near-term uncertainty despite a large backlog and revenue growth.

CoreWeave Stock Falls 38 Percent After Earnings Costs Rise Lockup Expiry

CoreWeave stock has fallen 38 percent since the August 11 earnings release, despite a 207 percent year-over-year rise in revenue and a record backlog of $30.1 billion. The slide came as operating costs increased and insiders faced an imminent IPO lockup expiry, fueling selling pressure from investors. Some market participants are looking to exchange traded funds as a way to gain exposure to CoreWeave without taking on the risk of a single stock. Two ETFs highlighted for indirect exposure are YieldMax AI & Tech Portfolio Option Income ETF (GPTY) and ARK Next Generation Internet ETF (ARKW). GPTY allocates around 4.39 percent to CoreWeave and uses options strategies to generate income, charging a 0.99 percent expense ratio and carrying about $49.08 million in assets. ARKW holds CoreWeave at about 1.56 percent of its holdings as part of a broader focus on AI and internet innovations, with a 0.82 percent expense ratio and roughly $3.01 billion in assets. Analysts on TipRanks show a Moderate Buy consensus for both ETFs, with upside targets suggested by recent data. ETFs offer liquidity and diversification benefits for those looking to participate in the AI rally without concentrating risk in a single name, but they also dilute the direct upside offered by owning CoreWeave shares alone.

The CoreWeave story reflects a common pattern in fast-growing AI plays: strong top-line angles and big future potential clash with current profitability pressures. A record backlog signals demand that could translate into future cash flow, but rising costs and a looming lockup expiry can erode near-term value and spark volatility. The market is weighing whether CoreWeave can convert backlog into sustainable earnings while controlling costs, and whether a diversified ETF approach provides a safer path than putting money directly into the stock. The broader AI infrastructure space remains prone to swings as investors assess execution risk, capital needs, and what profitable scale looks like in a category driven by hype and innovation.

Highlights

The next earnings cycle will reveal whether hype can turn into reliable earnings growth.