CoreWeave's huge contract backlog and 112% revenue growth mean demand is not its concern, but heavy capex, tens of billions of debt and a GAAP net loss make it high-risk. At about $63, below its moving average, I am buying now and expect a rebound to $80-$85, perhaps the late 80s.

The first arrow is CoreWeave, its symbol is CRWV. I think the easiest way to understand CoreWeave is that this company sells the infrastructure that underpins the AI boom.

CoreWeave operates a cloud platform specifically designed for artificial intelligence. Companies need enormous amounts of computing power using graphics processing units (GPUs) to train artificial intelligence models , and increasingly to actually run these models through inference.

CoreWeave builds the infrastructure, acquires massive amounts of graphics processing units, data center capacity and power, and then sells computing capacity to some of the world’s largest AI technology companies.

What I really like here is that CoreWeave doesn't necessarily have to predict the winning AI model. If the use of artificial intelligence continues to grow exponentially, which I believe will happen, there must be an entity that provides the computing power.

Think of it as if you were selling picks and shovels during a gold rush. Everyone is competing to build the best artificial intelligence model , but CoreWeave sells them the infrastructure needed to build it.

In the last quarter, CoreWeave generated revenues of approximately $2.6 billion, an increase of 112% year-over-year. What an amazing number!

But there is one number that really catches my attention. CoreWeave ended the last quarter with cumulative revenues of nearly $104 billion. Well, when I look at what will happen in the future, I find that this accumulated revenue is just future revenue.

It has increased by 246% compared to the previous year.

Even more surprisingly, the $104 billion does not include more than $25 billion in additional customer commitments that CoreWeave added earlier in the third quarter. Therefore, demand is clearly not this company's biggest concern.

The company also achieved approximately $1.5 billion in adjusted earnings before interest, taxes, depreciation and amortization during the quarter, giving it an adjusted profit margin of 59% .

However, CoreWeave is spending enormous sums of money building this infrastructure. Capital expenditures reached approximately $9.4 billion in the second quarter alone, while the company carries tens of billions of dollars in debt.

The company also recorded a net loss, according to Generally Accepted Accounting Principles (GAAP), of approximately $626 million for the quarter.

Therefore, it is not a perfect low-risk AI company. In fact, its stocks are classified as high-risk, which is why I trade CoreWeave options. I think these options look very profitable.

If you really want to expand your investment portfolio, you need stocks with high implied volatility, and CoreWeave stock has tremendous volatility. Therefore, I am interested in buying it now.

The upside is that CoreWeave has huge demand for contracts, impressive revenue growth, and the potential for improved corporate economics as its infrastructure gets up and running.

The downside is that it has spent millions, even billions, of dollars, which is a huge amount, in addition to incurring enormous debts to achieve this growth.

I think this is good, but it poses a risk to the company's future, and that is precisely why the share price is so important for CoreWeave. A great growth story can turn into a bad investment if you pay too high a price.

CoreWeave's stock price is currently around $63. It is extremely volatile. The stock price fell by 8% today, and what I would like to point out is that in late July, the stock price fell to nearly $60 per share , and that is what I am focusing on now because the stock is below the moving average.

It is significantly lower than the moving average, and lower than the Bollinger Band .

I believe these levels are roughly equivalent to the level of late July, when the stock saw a significant rise. I think what's happening now is that the stock market in general is experiencing selling pressure.

There are fluctuations, but I don't think they will last, frankly. Therefore, I believe Coreweave stock will return to approximately the moving average level, i.e., between $80 and $85 per share, and perhaps even to the late 80s.

Therefore, I now see this as a great opportunity, as the stock is significantly undervalued.