Cathie Wood’s Ark Invest buys over 136,000 shares of CoreWeave amid a selloff, despite a further 8% drop. CoreWeave stock down 62% from all-time highs, reflecting broader AI retreat. Concerns grow over balance sheet, with high debt and low margins raising questions about profitability. Wood bullish on CoreWeave’s disruptive model and partnerships with OpenAI and Microsoft.

CoreWeave markets itself as an AI hyperscaler, leasing data centers with Nvidia GPU clusters for AI workloads. Reported 134% revenue growth with a $55 billion backlog, but carries $14 billion debt and faces construction delays. Analysts forecast revenue to increase to $29 billion by 2028, with a target price of $130.44.

Company’s debt financing raises concerns, as interest rate exceeds operating margins. Renewals and sustained demand indicate stable growth, but financial structure and debt levels worry investors. CoreWeave aims for investment-grade status with creditworthy customers and nonrecourse financing. Future success depends on AI infrastructure demand growth and capital expenditure justification.

Read more at Yahoo Finance: Cathie Wood Keeps Buying the Dip in CoreWeave Stock. Should You?