CoreWeave's 16% Slump Spurs Exodus From Call Options Amid Weaker Outlook: Options Chatter
$CoreWeave (CRWV.US)$ ’s 16% slump Monday spurred an exodus from call options as hopes of a rebound for the neocloud company withered after it lowered its full year revenue guidance.
Contracts that give their holder the right to buy the stock at $160 over the next 10 days saw the heaviest trading among call options tied to CoreWeave as holders unloaded them amid a selloff that sent shares tumbling further below that strike price, bolstering the odds that the contracts would expire worthless next week.
At the same time, investors and speculators loaded up on put options that can shield their holders against a continued slump as losses mount, deepening the decline over the past month to more than 36%. Put options that give their holders the right to sell the stock at $90 by Friday attracted the heaviest volume as decline in share price fell below that strike price, pushing the contract well in the money.
The price of the $160 call options shrank 88% to 6 cents amid an exodus that saw more than 22,720 contracts changing hands. The stock price has fallen more than 40% since July 8, when it last traded above that strike price of $160.
The sell-off came after the company lowered its 2025 revenue forecast to a range of $50.5 billion to $5.15 billion, from the $5.15 billion to $5.35 billion outlook it provided in August.
The guidance was cut as CoreWeave grappled with delays in delivery of powered shell or the partially completed facility that can be customized to meet a customer’s specific requirements for the data center.
“Not only are the major hyperscalers being forced to issue capacity-constrained revenue guidance, but the phenomenon is also spreading to CoreWeave,” the JPMorgan analysts including Mark Murphy wrote in a note to clients Tuesday.
More than 721,880 call and put options changed hands. That put CoreWeave in fourth place for the most active stock optiosn, behind $NVIDIA (NVDA.US)$'s 2.37 million contracts, $Tesla (TSLA.US)$'s 1.19 and $Apple (AAPL.US)$'s 865,960.
The analysts lowered their rating on the stock to “neutral” from “overweight” and cut their price target on CoreWeave to $110, from $135 amid supply chain snags.
Despite the downward revision in ratings and target price, the JPMorgan analysts said, “we continue to see tremendous long-term opportunity for CoreWeave to serve the AI mega-trend,” citing its growing list of customers that now includes $CrowdStrike (CRWD.US)$, $Rakuten Group (ADR) (RKUNY.US)$, Poolside and Jasper.
(To see CoreWeave's financial data, click the earnings hub here.)
The delays overshadowed the company’s revenue backlog, which almost doubled to $55.6 billion as of the end of September and its 134% jump in third quarter revenue that beat analysts’ estimates.
While the average analyst price target on CoreWeave fell to $137.12, from $144 Monday, that figure still implies a potential share price increase of almost 50% from its current level of $91.46.
“We believe the company's ability to secure multibillion dollar commitments demonstrates the structural nature of AI infrastructure demand, though investors should expect continued profitability pressure as CRWV prioritizes growth and market share capture during this hyper-growth phase,” CFRA analyst Angelo Zino wrote in a note to clients late yesterday.
Share your thoughts on CoreWeave in the comments section. Do you see more losses, or are you hopeful that the stock could rebound and march toward its previous all-time high? Let your voice be heard by voting below. And if you want to read more options columns like this one on Palantir, or this one on Cipher Mining, follow me here, where you can also find my earnings stories on some of the biggest stocks.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Luzi Ann Santos
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Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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73565901 : corewee has made a cameback multiple times. plus it has the backing of NVDA. Thisnis just an opportunity to grab the stock at a great discount.
Ultra Thinker 73565901 : of course why not
RDK79 : add on dip![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
Meme_Short_Queen : $5
75863420 : Any advice for a beginner to treading and stock buy
Wall Street Raider 75863420 : If I was a novice, I would focus on big names first like NVDA, AMD etc. They normally aren't so violatile within -/+ 5 range. And have almost certainty they will simply rise in time.