CoreWeave Stock Is Eyeing Record Low Amid Insider Sales: Will It Rebound After Earnings?

CoreWeave (NASDAQ:CRWV) stock extended its sell-off last week and is edging closer to its all-time low as investors worry about the artificial intelligence (AI) industry and heavy insider selling. The shares fell to $40, down from a record high of $186. That slide faces a fresh test this week when the company publishes its earnings.

CoreWeave Insiders Have Dumped Shares After the IPO

CRWV stock has continued its strong sell-off this year. While the sell-off is due to the ongoing jitters in the AI industry, it has also coincided with insider sales. 

Benzinga data shows that its insiders, who include its founders, have sold 8.35 million shares worth over $707 million in the last 90 days. They have dumped 50.24 million shares in the last 12 months. 

Insider sales are usually seen negatively because these people have privileged information that ordinary investors don’t have. 

The sales have coincided with the ongoing events in the artificial intelligence (AI) industry, where CoreWeave has become the biggest neocloud. In its last earnings report, the company said that its revenue backlog jumped to $104 billion in the second quarter. It has already inked deals with companies like Microsoft, OpenAI, Anthropic, and Jane Street. 

On the other hand, there are signs that the neocloud industry is facing challenges. Microsoft (NASDAQ:MSFT) has started to reassess its relationship with neoclouds, pointing to the rising costs and project delays. Also, there are concerns about the future depreciation, with Gartner (NYSE:IT) noting that the impairments will jump in 2030.

CoreWeave’s debt load has continued soaring this year, reaching over $35.1 billion, with some of its bonds yielding over 15%.

The next important catalyst will be its earnings, which will come out on Monday. Benzinga data shows that the results will show that its revenue jumped by 160% in the third quarter to $3.54 billion. Investors will also pay a closer attention to its backlog, which will shed light on its demand now that competition is rising.

CoreWeave Stock is at Risk of Falling to a Record Low

On the charts, CoreWeave stock has formed a series of lower lows in the past few months. It recently dropped below the important support of $63.38, the neckline of the head-and-shoulders pattern. 

The stock has also slumped below all moving averages, a sign that bears have prevailed. Also, the Relative Strength Index (RSI) has dropped and is nearing the oversold level. Therefore, there is a possibility that the stock will drop to the record low of $33.76. A brief rebound towards the resistance at $63 is also possible.

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