Shares of CoreWeave plunged 10.1% to $72.87 on Thursday after fresh reports reignited fears that Meta Platforms is building a commercial cloud business — codenamed "Meta Compute" — that would sell spare AI computing power to outside customers, directly challenging the niche CoreWeave has staked its future on. The stock has now slid from a late-June close near $99.54 down into the low $70s , erasing roughly a quarter of its market value in weeks.
Your Best Customer May Soon Compete Against You
CoreWeave holds a $21 billion contract with Meta through December 2032. But if Meta brings enough of its own infrastructure online to supply its internal needs and sells the rest externally, it simultaneously loses the neoclouds as a customer while adding itself as a competitor in the same market.
Meta is spending $125 billion to $145 billion on AI infrastructure in 2026 alone — a budget that dwarfs CoreWeave's entire balance sheet. The difference between Meta casually selling excess capacity and making cloud a core revenue line remains unclear; CEO Zuckerberg has only said cloud computing is "definitely on the table."
The Backlog Looks Huge — But It Has an Expiration Problem
CoreWeave delivered Q1 revenue of $2.08 billion — more than double a year earlier — with a $99.4 billion backlog signaling massive contracted demand. But as one analysis noted, "neither threatens today's backlog. Both threaten what happens after it." Shareholders aren't just paying for current contracts — they're betting customers will renew and expand at similar prices once those deals mature.
A Mountain of Debt Makes the Margin for Error Razor-Thin
CoreWeave's total debt rose to $24.9 billion in Q1, producing a debt-to-equity ratio (total borrowings divided by shareholder equity) of 5.2 — extremely high by any standard. Its net loss widened to $740 million with a negative 36% margin, driven partly by $536 million in interest expense alone. If renewal rates soften under competitive pressure from Meta, servicing that debt becomes significantly harder.
Demand Is Real, But So Is the Crowding
Management noted on its May earnings call that demand "is accelerating and we remain largely sold out of our 2026 capacity."
Ten customers have each committed to spending at least $1 billion. Yet Bernstein analyst Madison Rezaei has warned that Meta's entry could make CoreWeave's business model "potentially unsustainable" over time. With the stock now trading around 9 times trailing sales despite triple-digit growth, the market is pricing in real doubt about whether today's torrid demand will survive tomorrow's competition.