AI Momentum Softens as CoreWeave Falls 18% Amid Sector-Wide Repricing

The artificial intelligence rally, which propelled tech stocks to record highs in early 2024, has experienced a noticeable correction as investors reassess valuations and capital allocation. CoreWeave (CORE), a leading provider of cloud infrastructure for AI workloads, has dropped 18% since March 1, reversing gains made during the previous year’s surge. The decline follows a 120% rally in 2024, driven by soaring demand for GPU-accelerated computing in generative AI applications. The broader market reflects the shift: NVIDIA (NVDA) has dipped 6.3% over the same period, while AMD shares have fallen 5.1%, both retracing gains from their 2024 highs. Meanwhile, the CBOE Volatility Index (VIX) has risen to 19.4, up from a post-pandemic low of 13.8 in January, indicating elevated market uncertainty. These movements suggest a short-term repricing of high-growth tech stocks, particularly those tied to AI infrastructure rather than end-user adoption. CoreWeave’s valuation metrics now appear more moderate. The stock trades at 28x forward earnings, down from a peak of 42x in late 2023, while its price-to-sales ratio stands at 11.3—still premium but less stretched than during the peak speculative phase. Analysts highlight that the company’s revenue grew 68% year-over-year in Q4 2025, with its data center capacity expanding by 34% to 2.1 exaflops, reinforcing underlying demand. Market participants are now weighing whether the current correction offers a strategic entry point. Institutional investors have begun accumulating shares, with insider buying activity rising 22% over the past month. Given sustained enterprise demand for AI compute and CoreWeave’s growing share of the U.S. cloud GPU market—now estimated at 14%—some believe the dip presents a buying opportunity. However, further volatility is expected as macroeconomic signals, including interest rate expectations and semiconductor supply dynamics, continue to influence sentiment.