CoreWeave, a top tech stock, has impressive sales but struggles with high interest expenses, causing profitability issues. Demand for cutting-edge chips has propelled AI-related companies’ valuations sky-high. CoreWeave, renting computing capabilities, saw a surge in value since going public. However, recent stock declines raise questions about its future performance.

CoreWeave reported a slowdown in growth but doubled revenue, benefiting from strong demand from hyperscalers like Meta Platforms. Despite the phenomenal growth, its inflated valuation raises concerns for investors. With a market cap of $88 billion, the company remains unprofitable, with net losses totaling $715.3 million in the first nine months of 2025.

The company’s $841.4 million net interest expenses overshadow its $43.6 million operating profit, hindering profitability. Despite a reduced stock price, CoreWeave’s lack of profitability is a red flag for investors. With a market cap of $45 billion, the company’s future remains uncertain amid intense AI demand.

Investors may want to reconsider investing in CoreWeave due to its lack of profitability and high valuation. The company’s market cap of $45 billion, although lower than Nvidia’s, still poses risks. The Motley Fool’s Stock Advisor team recommends other stocks with potential for significant returns, excluding CoreWeave.

Read more at Yahoo Finance: CoreWeave Is Down Around 30% in 6 Months. Has It Become a Steal of a Deal?