CoreWeave's Stock Surge: Or, How To Profit From the AI Hype Train
Okay, so Citi is pumping CoreWeave, huh? Upgrading their price target to $192? An analyst named Tyler Radke is drooling over "rising artificial demand." Give me a break. "Artificial demand" is just a fancy way of saying "everyone's throwing money at AI because they're afraid of missing out."
85% QoQ backlog growth? Sounds impressive until you realize it's all built on deals with the same players – Nvidia, Meta, and, of course, OpenAI. Radke says "concerns around customer concentration are waning." Waning? They're practically gone if you only count the five companies that matter. What happens when the AI bubble bursts? Or when these tech giants decide to build their own damn infrastructure instead of lining CoreWeave's pockets? According to a recent report, one analyst recommends to "Buy this AI cloud stock ahead of earnings, says Citi."
This whole thing feels like the dot-com boom all over again. Remember Pets.com? Webvan? Companies with ridiculous valuations based on nothing but hype and promises? CoreWeave is riding that same wave. Everyone's so focused on the potential upside that they're ignoring the very real downside.
Apple's Overvaluation: A Sign of the Times?
Speaking of overvalued... Apple's stock is near its 52-week high. The Motley Fool (yeah, them) is saying Apple wasn't one of their top 10 stocks to buy. Shocker. They're dangling the carrot of past successes – Netflix in 2004, Nvidia in 2005. "Invest $1,000 and become a millionaire!" It's the same old song and dance.
Offcourse, Apple is a different beast than CoreWeave. They actually make and sell physical products, even if those products are overpriced and increasingly irrelevant. But the underlying problem is the same: investor greed. People are so desperate to make a quick buck that they're willing to ignore basic common sense.
The Illusion of Control: Long-Term Contracts and Diversification
CoreWeave's "safer strategy" of signing longer contracts (five to six years) doesn't exactly fill me with confidence. It just means they're locking themselves into deals based on today's inflated prices and tomorrow's unknown realities. What if the technology changes? What if a competitor comes along with a better, cheaper solution? Those long-term contracts suddenly become albatrosses around their necks.
And this talk about diversifying the customer base? Radke says Microsoft/OpenAI are becoming "smaller backlog contributors" because of Meta and Nvidia. So, instead of relying on two giants, they're relying on four? That's not diversification; that's rearranging the deck chairs on the Titanic.
Maybe I'm being too cynical. Maybe CoreWeave really is the next big thing. Maybe AI will save the world and make us all rich. But let's be real, the market isn't always right. It's driven by emotions, fear, and greed. And right now, those emotions are running high.
