Insights 
VT 
Shares of CoreWeave (CRWV) declined by over 10% following the release of their earnings. Despite posting solid earnings, the company’s guidance was weaker than anticipated, leading to a downturn in stock price. The market had been expecting a strong report to continue the momentum seen in AI chip stocks, which did not materialise.
The primary issue affecting CRWV was a slight reduction in margins and a shortage of energy supply. Several data centres are currently halted due to insufficient power in the grid, potentially causing a revaluation of chip stocks. The energy shortfall is expected to persist since nuclear power options will take years to become available.
Trading Levels Of Interest
For short-term trading, the $85 level is being observed, as it was a pivotal low on August 20th and September 5th, 2025. A drop to this level could prompt a quick rebound.
For swing trading, attention is on the $60.75 level, marking the pivot high from April 2nd, 2025, and a breakout on May 13th, 2025, with expectations of a multi-week bounce.
Long-term investments in CRWV are being avoided until the stock hits new lows and a significant reversal occurs.
The weak guidance from CoreWeave confirms a major risk we’ve been tracking: the energy bottleneck for AI. The problem isn’t chip demand, but the lack of power to run the data centers, a reality foreshadowed by energy agency reports last year. This development suggests the entire semiconductor and data center sector could face a significant repricing in the coming weeks.
Strategy Amid Energy Concerns
We are looking at buying put options on a basket of AI-related stocks, likely through an ETF like the SMH. The CoreWeave news has injected fear, which will increase implied volatility across the sector, but a sharp downturn could still make these positions very profitable. This is a direct bet on the idea that this power-grid issue is not isolated and will hit the whole sector.
For a short-term trade, we see the $85 level on CRWV as a key support zone, noting its importance back in August and September. Instead of buying shares, we could sell out-of-the-money put spreads with an expiration date a few weeks out. This strategy allows us to profit if the stock simply stays above this critical level, benefiting from both a potential bounce and the decay of elevated option premiums.
The more significant technical level for a multi-week swing trade is down at $60.75, which we remember as the major breakout point from May 2025. Should the sector weakness drag CRWV down that far, we would consider buying call debit spreads dated for early 2026. This defines our risk while providing significant upside if that former resistance level turns into strong support.
Beyond this single stock, we anticipate a spike in market-wide volatility as investors question the high valuations across the tech sector, which have ballooned since the bull run of 2024. Looking back at the market turbulence of 2022, the VIX consistently traded above 25, a level we have not seen for some time. We should be prepared for a return to a higher volatility regime, which makes selling premium on broader indices increasingly attractive.
