Duan Yongping's bottom-fishing gets trapped? oreWeave drops 11% in a single day, 100-billion-yuan orders can't hide the 1% profit margin dilemma

Author: Deep Tide TechFlow

On May 8th, AI cloud computing provider CoreWeave (CRWV) plummeted 11.4% in a single day, closing at $114.15. This is another “performance day decline” since the company’s IPO in March last year. But unlike previous declines, this drop was compounded by a more striking contrast: Duan Yongping, widely known in the Chinese-speaking world as a disciple of Buffett, just built a new position in CoreWeave for the first time in Q4 2025, with approximately $20 million, and based on the position size and Q4 average price, the entry point was near CoreWeave’s lowest intra-year range in December 2025.

CoreWeave is currently one of the most divisive AI assets in the US stock market. On one side is a near $100 billion order backlog, a narrative of being a “market seller” deeply tied to Nvidia; on the other side are the financial realities of scale expansion leading to increased losses, and insiders continuously cashing out. The Q1 financial report acts like a prism, making this divergence particularly clear.

Q1 Financial Report: Revenue Doubled but Losses Widened, Q2 Guidance Breaks Valuation

CoreWeave’s Q1 revenue was $2.08 billion, up 112% year-over-year, and up 32% quarter-over-quarter, exceeding the LSEG market expectation of $1.97 billion. However, adjusted loss per share was $1.12, worse than the expected loss of $0.90; net loss widened to $740 million, more than doubling from $315 million last year.

The real trigger for selling was the forward guidance. The company provided Q2 revenue guidance of $2.45 billion to $2.6 billion, with a midpoint of $2.53 billion, well below the market expectation of $2.69 billion. Meanwhile, the capital expenditure forecast for 2026 was raised from a minimum of $30 billion to $31 billion, with CFO Nitin Agrawal attributing the increase to rising component prices.

The fragility of profit structure is fully exposed. Q1 adjusted EBITDA reached $1.16 billion (profit margin 56%), which looks impressive; but adjusted operating profit was only $21 million, with an operating margin squeezed to 1%. The reason lies in a 127% year-over-year surge in technology and infrastructure costs to $1.27 billion, and sales and marketing expenses skyrocketed over 6 times to $69 million. Revenue is rising, but costs are rising even faster.

CEO Michael Intrator emphasized in the earnings call: “We have reached hyperscale.” He disclosed that the company currently has 10 clients committed to spending over $1 billion, significantly improving the concentration risk compared to 62% reliance on Microsoft for revenue in 2024. Intrator also expects CoreWeave’s annualized revenue to exceed $30 billion by the end of 2027.

Bullish Narrative: $100 Billion Orders, Deep Ties with Nvidia

The core support for the bullish logic is the order backlog. As of the end of Q1, CoreWeave’s remaining performance obligations (RPO) reached $99.4 billion, a net increase of about $33 billion quarter-over-quarter, nearly quadrupling year-over-year. Intrator stated that new contracts signed in Q1 exceeded $40 billion.

The client list is also reshaping market perception. In Q1, Anthropic was added as a client, providing computing power for its Claude series models; signed a $2.1 billion AI cloud agreement with Meta; trading firm Jane Street committed about $6 billion in orders and separately completed a $1 billion equity investment. Nvidia repurchased $2 billion of CoreWeave’s Class A common stock this quarter. As the world’s largest GPU supplier, a CoreWeave investor, and a key customer, Nvidia’s triple identity as “adopted son” is often highlighted.

On the financing side, CoreWeave completed an $8.5 billion investment-grade HPC (high-performance computing) delayed draw term loan (DDTL) in Q1, with a rate below 6%, which management calls “innovative.” Since the beginning of the year, the company has raised over $20 billion in debt and equity financing, with the weighted average cost of debt dropping about 80 basis points. S&P Global Ratings also upgraded CoreWeave’s credit outlook from “Stable” to “Positive.”

Bearish Logic: Larger Scale Means Less Profitability, Debt Snowball Grows

But another set of numbers in the financials is creating anxiety. Capital expenditure in Q1 was $6.8 billion, and the company expects Q2 capital expenditure to further rise to between $7 billion and $9 billion. Q2 interest expense guidance is between $650 million and $730 million, reflecting rapid debt expansion.

Total debt has already reached an astonishing scale. As of the end of Q1, CoreWeave’s total debt was about $25 billion. Relative to the company’s current annualized revenue, this leverage level is significantly higher than traditional cloud service providers. Morgan Stanley data shows that CoreWeave’s total debt financing in 2025 could reach approximately $11.8 billion, far exceeding the roughly $1.5 billion in equity financing in the same period. The core expansion tool is the DDTL, which uses order contracts as collateral to finance GPU procurement from banks—“pre-order, post-finance” model.

The sharpest skepticism concerns profit quality. Despite management repeatedly emphasizing a 56% EBITDA profit margin, adjusted operating profit is only 1%, and the “true” gross margin after deducting technology and infrastructure costs is about 4%, showing compression both quarter-over-quarter and relative to market expectations. Intrator attributed this to the stage effects of scale expansion: as the company rapidly expands from 1 gigawatt of operational scale, the additional capacity dilutes profit margins significantly. He promised this is the “profit margin bottom,” and margins will gradually rebound in future quarters.

But the market is currently unwilling to pay for this promise. While analysts from Morgan Stanley and Jefferies gave positive comments, CoreWeave’s stock has experienced a deeper decline after this earnings report than in previous quarters.

Insiders Continue Selling, Mirroring Duan Yongping’s Bottom-Fishing

Before and after the earnings release, insiders kept selling. CEO Mike Intrator sold 307,693 shares at the end of April; co-founders Brian Venturo and Chen Goldberg also sold shares; institutional shareholder Magnetar Financial had previously sold over $300 million worth. The latest disclosures show a major shareholder recently sold about 1.2 million shares again.

This contrasts sharply with Duan Yongping’s Q4 building of a position. According to the 13F filing disclosed by H&H International Investment in February 2026, Duan Yongping first built a position in CoreWeave in Q4 2025, holding 299.9k shares, at a time when the stock had retreated over 65% from its high, and market concerns about its debt structure peaked.

It’s noteworthy that CoreWeave only accounts for 0.12% of Duan Yongping’s H&H total holdings, indicating a “light position” for testing waters. Meanwhile, Duan Yongping significantly increased his Nvidia holdings by over 1110%, and newly built positions in Credo Technology (high-speed interconnect) and Tempus AI (AI healthcare), with three new AI positions totaling less than 0.3%. This suggests that Duan Yongping’s real heavy bet is on Nvidia itself, and CoreWeave is more like a small extension in the downstream AI computing industry chain.

The Key Question Now: Turning Point or Trap?

Intrator posed an emotionally charged retort during the Q&A: “I’ve always felt that everyone is staring at the tree of the stock price, missing the whole forest.”

This phrase perfectly summarizes the current bull-bear standoff. Bulls see the forest as nearly $100 billion in contract backlog, diversified customer base, Nvidia’s triple binding, and credit upgrades; bears see the tree as 1% operating profit margin, widening net losses, aggressive capital expenditure, and insiders continuously selling.

CoreWeave’s stock price has still risen nearly 80% since the beginning of the year, with over 200% gains since IPO. But when a stock’s bullish case is based on future narratives, and the bearish case on current figures, each earnings report becomes a battleground for these two narratives. Duan Yongping previously told Fang Sanwen: “AI is a huge revolution brought by the qualitative change in computing power, impacting or surpassing the internet and industrial revolutions. Currently, the AI bubble is obvious; 90% of companies may be eliminated, but those that survive will become the next generation of giants.” His 0.12% light position itself admits the uncertainty of this gamble.

The next key test is the Q2 earnings report. If operating profit margins do not rebound as management promised, the credibility of the “forest” narrative will face a real stress test.