Bridgewater Associates made a surprising investment last quarter, snapping up 270,556 CoreWeave (CRWV) shares valued at $37 million. The timing stands out because Ray Dalio, who founded the hedge fund, recently warned about artificial intelligence stocks trading at bubble levels.
Yet Dalio isn't telling anyone to panic and dump their holdings. His argument is more nuanced. Yes, prices have climbed way past what many companies are actually worth, but bubbles don't just pop on their own. They need a catalyst, like sudden policy changes or new wealth taxes, to bring them down, and Dalio is worried about what comes next for investors who stay put.
When markets get this frothy, history suggests the following decade typically delivers disappointing gains. Dalio explained the need for portfolio diversification into other asset classes such as gold (XAUUSD). The precious metal recently blew past $4,300 per ounce, hitting fresh records.
The CoreWeave purchase shows Bridgewater sees an opportunity despite the warnings. CoreWeave runs specialized data centers built specifically for AI work and maintains close ties with Nvidia (NVDA).
That puts the company right in the path of surging demand for the massive computing horsepower needed to build and operate AI systems. Bridgewater appears willing to ride that wave while keeping Dalio's longer-term cautions in mind.
The Bull Case for CoreWeave Stock
CoreWeave blew past revenue expectations in Q3 but stumbled on its annual guidance, which dragged the stock lower last week. In the September quarter, the AI infrastructure company posted revenue of $1.36 billion, an increase of 134% year-over-year (YoY) and above consensus estimates of $1.29 billion.
Despite the strong quarter, management estimated full-year revenue between $5.05 billion and $5.15 billion, missing analyst forecasts of $5.29 billion. The guidance miss was attributed to construction delays from a third-party data center developer. CEO Mike Intrator explained that the delay involves powered-shell facilities, partially built structures where CoreWeave installs its equipment.
The shortage isn't about actual electricity but instead getting these semi-finished buildings ready for use. Intrator emphasized the delay affects just one location among CoreWeave's 41 data centers and shouldn't hurt the company's massive $55.6 billion backlog.
CoreWeave rents Nvidia chips to companies building AI systems and counts major cloud providers like Google (GOOG) (GOOGL) and Microsoft among its customers. The business model has proven wildly successful, with CoreWeave securing huge contracts during Q3. OpenAI expanded its relationship by $6.5 billion, while Meta signed a deal potentially worth $14.2 billion over six years.
CoreWeave narrowed its net loss to $110 million from $360 million a year earlier. Management expects most construction delays to be resolved by the first quarter of 2026. To reduce reliance on outside developers, CoreWeave is building its own facilities in Pennsylvania, giving the company more direct control over timelines.
Finance chief Nitin Agrawal said 2026 expenditures should easily surpass double what the company spends this year, which ranges between $12 billion and $14 billion. CoreWeave continues to expand its power capacity, reaching 2.9 gigawatts under contract, up from 2.2 gigawatts three months ago.
Is CRWV Stock Still Undervalued?
Analysts tracking CRWV stock forecast revenue to increase from $5.12 billion to $28 billion in 2028. The company is forecast to report an adjusted earnings per share of $4.01 in 2028, compared to a loss of $1.37 per share in 2025. If the tech stock is priced at 30x forward earnings, which is reasonable, it should gain 70% over the next two years.
Out of the 28 analysts covering CRWV stock, 13 recommend “Strong Buy,” one recommends “Moderate Buy,” 13 recommend “Hold,” and one recommends “Strong Sell.” The average CRWV stock price is $131.23, above the current price of $73.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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