CoreWeave Stock Forecast as Ray Dalio Explains Why AI Bubble May Burst

CoreWeave stock has moved horizontally in nearly two months despite reporting strong revenue and backlog growth. CRWV was trading at $91.72 on Tuesday, down by nearly 50% from its all-time high. It may be at risk of a strong bearish breakout as Ray Dalio warns of an AI bubble and as a risky chart pattern forms.

CoreWeave Stock at Risk as Dalio Warns of an AI Bubble

CRWV stock has wavered and is at risk of a steeper bearish breakout as top analysts warn that the AI bubble may burst. In a statement this week, Dalio, who founded Bridgewater Associates, warned that this burst could happen at any time.

Dalio believes that gaps in the AI industry persist. One of the top risks is the rising interest rates and bond yields. In the US, the ten-year yield jumped to 5.3%, the highest level since 2002. The same is happening in the shorter-term bonds.

This is important for a company like CoreWeave because it uses the bond market to finance its large infrastructure projects. A closer look at its bonds show that they are in the junk section, with its 2032 bonds yielding over 11%.

Dalio has also pointed to the revenue-and-spending gap among the largest companies. A recent report by the FT estimated that OpenAI plans to burn $280 billion through 2030. Anthropic also plans to spend billions of dollars on its data center rollout.

The risk, however, is that these companies, which are all CoreWeave’s clients, face competition from open-weight models that are rising. Some of these models are from companies such as Moonshot, Alibaba, and DeepSeek. Just this week, Reflection AI launched Beam, an open-weight model.

If the bubble bursts as Ray Dalio predicts, then companies like CoreWeave will be the most affected because of their substantial debt.

CoreWeave is Facing a Depreciation Challenge

The other big risk the company faces is depreciation. CoreWeave’s business is based on it borrowing substantial amounts of money to buy GPUs. It then predicts that these GPUs will have a useful life of 5 to six years, by when they will have repaid themselves. The company also believes that it will be able to sell these GPUs and recognize a good return over time.

However, some analysts believe that the useful life is about 2 to three years. This is already showing in its results. Its last financial results showed that its depreciation and amortization jumped to over $1.39 billion in the second quarter and $2.52 billion in the first half of the year.

These are huge numbers considering that the quarterly and half-year revenue stood at $2.5 billion and $4.6 billion, respectively.

These risks likely explain why the company has a high short interest of 12%, a sign that many investors still expect the stock to drop.

CoreWeave Stock Depends on AI Spending Staying Strong

CoreWeave remains one of the clearest public-market exposures to AI infrastructure investment. Its $104 billion backlog shows customers continue committing substantial capital to computing capacity.

The same model requires CoreWeave to fund large infrastructure projects before earning revenue over time. Rising bond yields therefore create more direct risk for CRWV than for cash-rich technology companies.

Dalio’s AI bubble warning does not mean CoreWeave stock will collapse. His argument instead highlights the vulnerability of debt-heavy AI infrastructure if financing conditions continue tightening.

For now, the $66.55 neckline remains the main chart level to monitor on the supplied setup. A confirmed break would strengthen the bearish case, while a recovery above recent range resistance would weaken it.

This article is for informational purposes only and does not constitute financial or investment advice. Technical patterns, debt yields and market conditions may change as new information emerges.