Cathie Wood’s ARK Invest has made a significant purchase of shares in CoreWeave, an AI infrastructure company backed by Nvidia, signaling strong conviction despite a recent downturn in the stock's performance. The move comes after CoreWeave's stock price fell over 42% in the last month following a downward revision of its sales forecast.
ARK Invest acquired 350,734 shares of CoreWeave, valued at approximately $24 million. This classic "buy the dip" strategy from the prominent tech investor suggests a belief in the company's long-term potential, even as market sentiment has soured.
Key Takeaways
- Cathie Wood's ARK Invest purchased nearly $24 million worth of CoreWeave (CRWV) stock.
- The purchase follows a more than 42% decline in CoreWeave's stock price over the past month.
- CoreWeave recently lowered its 2025 revenue guidance due to a third-party data center delay.
- Despite the guidance cut, the company's sales backlog has surged to $55.6 billion, an 85% increase from the previous quarter.
A Contrarian Move in a Volatile Market
While many investors have been selling off their positions in CoreWeave, Cathie Wood has taken the opposite approach. Her firm’s recent acquisitions underscore a long-held strategy of investing in what she identifies as disruptive technologies with long-term growth runways, often ignoring short-term market volatility.
This investment philosophy has defined ARK Invest, which is known for its concentrated, high-conviction portfolio. Wood has a track record of making early bets on transformative companies, including purchasing Tesla shares as early as 2016 and Nvidia in 2014, long before they became market darlings.
The performance of her flagship fund, the ARK Innovation ETF, speaks to this approach. So far in 2025, the fund has seen returns of nearly 60%, significantly outperforming the S&P 500's 13% gain.
Understanding CoreWeave's Business and Recent Struggles
CoreWeave operates as a specialized cloud provider, offering access to high-performance computing power essential for developing and running artificial intelligence models. The company essentially rents out GPU capacity, primarily using Nvidia's advanced chips, to businesses that need immense processing power without the high cost of building and maintaining their own hardware.
An AI Power Grid
Think of CoreWeave as a utility or power grid for the AI industry. Companies can plug into its infrastructure to access the computational muscle needed for AI development, paying for what they use. This model has become increasingly critical as the demand for AI processing has exploded.
Despite its crucial role in the AI ecosystem, the company's stock has faced significant pressure. The primary catalyst for the recent sell-off was a revision to its financial outlook.
Management lowered its 2025 revenue guidance to a range of $5.05 billion to $5.15 billion, down from a previous forecast of $5.15 billion to $5.35 billion. This new projection fell short of Wall Street's consensus estimate of $5.29 billion.
The Reason Behind the Revision
Company officials have attributed the guidance cut not to a drop in demand, but to a logistical issue. A delay at a single third-party data center developer has reportedly pushed some GPU capacity expansion, and the associated sales, from the final quarter of 2025 into early 2026.
While this timing issue rattled investors, other metrics point to robust underlying growth. The company's sales backlog has soared to $55.6 billion, an 85% increase quarter-over-quarter. Furthermore, its third-quarter sales reached $1.36 billion, more than double the figure from the same period a year earlier, while net losses narrowed significantly.
The Nvidia Connection
CoreWeave's strategic importance is highlighted by its deep relationship with AI chip giant Nvidia. Nvidia is not just a supplier but also a major investor, holding a substantial stake in the company.
According to recent filings, Nvidia holds 24.28 million shares of CoreWeave, a position valued at nearly $3.3 billion. This stake represents approximately 6% of CoreWeave's total shares and stems from an early $100 million investment.
The partnership extends beyond an equity stake. The two companies have a $6.3 billion "take-or-pay" agreement for cloud capacity that runs through 2032, ensuring a long-term, stable business relationship. Nvidia CEO Jensen Huang has publicly praised CoreWeave as a "great startup" that his company supports within its AI infrastructure ecosystem.
In a related move, ARK Invest also recently purchased 93,374 shares of Nvidia, worth around $17 million. While not a massive position for the fund, it marks a re-entry into the stock that has come to define the AI boom.
ARK's Broader Investment Strategy
The CoreWeave purchase was part of a broader series of trades by ARK Invest that also showed increased conviction in the cryptocurrency and biotechnology sectors.
The firm made several notable acquisitions in the digital asset space:
- Bullish: Added 49,900 shares of the crypto exchange, which owns CoinDesk and recently launched a $1.1 billion IPO.
- BitMine: Purchased 31,890 shares.
- ARK 21Shares Bitcoin ETF: Acquired an additional 20,700 shares.
These buys occurred even as Bitcoin's price experienced a dip, falling below the $85,000 mark. Additionally, Wood reinforced her long-standing belief in gene-editing technology by purchasing 67,078 shares of CRISPR Therapeutics for $3.3 million.
To balance these new positions, ARK trimmed its holdings in several other companies, including GitLab (GTLB), Exact Sciences (EXAS), Iridium (IRDM), and Advanced Micro Devices (AMD).
