CoreWeave (CRWV) Might Be a UFO!
It's August so that means it's the official start of pumpkin spice season! I already weaved a brand new scarf and hat to celebrate, as is normal human tradition. But before I discuss why CoreWeave might be a UFO...
What's the Word on the Street?
The market is up yet again, still basking in the glow of yesterday's basically-at-expecations CPI (Consumer Price Index) report. It's now all but assured that the Fed will be cutting interest rates in September.
Tomorrow the PPI (Producer Price Index) releases and may give investors a glimpse at how suppliers are handling things.
CoreWeave (CRWV)
What Is It?
CoreWeave is a cloud infrastructure company that provides high-performance computing resources optimized for workloads such as artificial intelligence, machine learning, visual effects, and batch processing. The listed name for CRWV is CoreWeave, Inc. Class A Common Stock.
Why Is It a Possible UFO?
Primarily the reaction (overreaction?) after its earnings report, its current share price relative to its fair value and (formerly (more on that later)) what other option traders expect are the reasons CRWV could be a UFO.
What About Recent News?
CRWV just released its earnings yesterday and "reported an adjusted earnings per share loss of 60 cents for the June quarter, compared to Wall Street’s consensus estimate for a 23 cent loss, according to FactSet."
However, despite that, revenue more than tripled. CRWV has been spending a lot on expansion. It's taking on a lot of debt to fund that expansion (which is a risk), but it's still projecting more growth in the future.
What's the Current Price?
Having only listed in March of this year, CRWV has had a great run so far. It's taken a beating for the month, but has taken quite the hit today after earnings. The market tends to overreact and investors are focusing more on the current losses reported, rather than the beat on revenue and growth projections.
It's important to keep in mind that traders and investors should base their financial decisions on a stock's value in the future, not the present or past. That's why I think CRWV can bounce back, at least in the short term, from what's probably an overreaction.
What’s the Fair Value?
I’d first like to emphasize that fair value is subjective. Many analysts at many banks and institutions rate stocks differently and assign fair value in their own unique way. So, what I like to do is take all the recent fair values since the most recent earnings report and average them. In this case…
Since CRWV's most recent earnings report on 08/12/2025, it has received 4 ratings and taking the average, the fair value might be somewhere around: $127.
All ratings are a Hold. The lowest price target is $105, while the highest is $168.
What Do Options Traders Expect?
Puts are trading over equidistant Calls, which means traders think there is a chance to the downside. You can see because… forget about the green columns and focus on the red. Notice how on the right side for the $115 Put it says $10.90, it’s $8.00 for the equidistant Call at $140.
The premium (the credit you receive for executing the trade) is currently more for selling Puts, as opposed to selling Calls. Basically because of that, option traders expect the stock to go down, rather than up.
This isn't actually what I want, but when I originally placed the trade, it was reversed. By the time the order was filled and I took this screenshot, it changed. The strike I took is far from the current price and below fair value, so I'm not worried.
How About Volatility?
The IV rank (the purple line) for CRWV (stock price in blue) is currently hovering around 0.92, which is pretty low (IV rank goes from 0-100). This makes short strategies (which are what I prefer) less attractive.
What's the Trade?
My preferred trade is a variation of the wheel without the rolling, AKA cash-secured puts. I typically like to target stocks that offer a dividend and are below fair value.
Why a dividend? If the trade results in assignment and I’m on the hook for X amount of shares, I can at least be satisfied knowing I picked a (hopefully under fair value) company that will pay me a small amount while I run the other side of the trade AKA covered calls.
CRWV does not offer a dividend, but that’s not a dealbreaker!
It’s a fairly low-risk strategy (all options trading is risky!), that has a higher probability of success, but requires a higher amount of collateral.
So if you saw the most recent image above, I already STO (sold to open) 1 contract of the $85 Put for the September 29th expiration. I like to have a DTE (Days To Expiration) that is around ~45 days.
When the trade reaches 50% profit I will buy it back. I don’t like to be greedy and go for more profit, because I would rather not waste my time being in a trade for too long.
What About Alternative Trade Ideas?
- If the collateral requirement is too high, another idea is a put credit spread. You would sell a put at a strike below the current share price and then buy a put at a lower strike than the put you sold. By doing so, you will avoid the collateral requirement of a cash-secured put, but the credit received will be smaller. Also, if the trade goes sideways, you will not be assigned shares so no collecting dividends and running covered calls afterwards.
- Just invest! 1 share or even fractional shares are a way to get a foothold in a stock that you think might increase in value.
Wait…Where Are the Candlesticks? And All the Other Indicators?
I know many traders love their candlesticks and a ton of indicators. I prefer simplicity. Candlesticks aren’t necessary unless you’re the kind of trader that wants to try and pick the perfect moment to execute a trade, and even then it’s not a sure thing.
As for indicators, there are a ton. Some of them work sometimes. None are perfect. I don’t want to get bogged down with too many. You’ll drive yourself crazy looking at too many of them, so find a handful you like and stick with those.
Disclosures
- I currently have an open trade with CRWV (as mentioned in this post).
- No trade is a sure thing. There is always risk involved.
- This blog post is not meant to take the place of financial advice, but hopefully acts as a guide for learning or informational purposes.