This year, CoreWeave (NASDAQ: CRWV) joined the list of hot new artificial intelligence (AI) stocks to buy. The company’s close partnership with chipmaker Nvidia made it appear to be a fairly safe way to invest in AI, and its valuation has tripled since it went public back in March.
In the past three months, however, the price of this AI stock has fallen by around 26% (returns as of Sept. 17). One reason for the price drop is that insiders appear to be cashing in and selling stock after the post-IPO lockup period expired last month. Unfortunately, the decline in valuation this creates has introduced worries that CoreWeave’s plans for an acquisition (which could help improve CoreWeave’s financials) are now in jeopardy. These worries are exacerbating the selloff.
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