AI Bubble Index Hits 74 as CoreWeave (CRWV.US) Shares May Break Below $50

Stock News
10/26

According to Woofun AI, CoreWeave, Inc. (CRWV.US) shares extended their decline, touching a new low since May of last year at $54.25, a drop of nearly 70% from their all-time high, with the market worried the stock could fall below the critical $50 threshold.

The artificial intelligence stock bubble index has now climbed to an extreme zone of 74 points, reflecting that the scale of infrastructure investment and company valuations far exceed actually disclosed revenue levels.

Ray Dalio warned that rising interest rates could burst the bubble, while Ken Griffin compared it to the internet bubble.

Data compiled by Woofun AI shows that a Gartner report pointed out that new cloud service companies carry higher risk than large cloud computing enterprises, and estimated that by the end of 2030, more than $3.5 trillion in artificial intelligence infrastructure investment could face impairment risk.

This macroeconomic concern has translated directly into short-selling pressure on CoreWeave, Inc. (CRWV.US), with its short interest ratio having risen to 15%, the yield on bonds maturing in 2031 having climbed to 15%, while the company's total debt scale is close to $30 billion, and capital expenditure is expected to remain high.

Deterioration in the competitive landscape has intensified valuation pressure. Almost all Bitcoin mining companies have rushed into the new cloud services sector. RUM Group (RUM.US), formerly known as Rumble, entered through the acquisition of Northern Data. SpaceX (SPCX.US) secured orders from Google (GOOGL.US) and Anthropic. Meta (META.US), formerly Facebook, as well as private companies such as Lambda, Nscale, and Firmus, are also grabbing market share.

From a technical perspective, CRWV shares have fallen below the $64 neckline support of a "head-and-shoulders" pattern, while also breaking through the 50-day moving average and the strong $75 support and pivot point shown by the Murrey Math Lines analysis tool, and are currently still below the Supertrend indicator.

If the ultimate support level of $50 is lost, the share price could further drop to the oversold zone of $37.5.

This is a severe stress test of the market's valuation logic for AI infrastructure since the bursting of the internet bubble, and the double squeeze of high leverage and new entrants is reshaping industry risk pricing.

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