CoreWeave (CRWV), a cloud provider that rents GPU computing power for artificial intelligence workloads, faces a major test on Nov. 10, when the company is scheduled to report its third-quarter earnings. Shares have declined this year amid concerns over artificial intelligence spending, rising borrowing costs, and intensifying competition in cloud computing, and the stock has now formed a head-and-shoulders pattern on its daily chart.

CoreWeave reported $35.6 billion in total indebtedness as of June 30, 2026. Investors will be watching closely to see whether rapid revenue growth and the company's $104 billion backlog can offset its mounting financing costs.

Head-and-Shoulders Pattern Deepens the Downtrend

The daily chart shows CRWV stock has slumped this year, with the sell-off intensifying on Thursday as US equities erased $2 trillion in value. The shares recently dropped below the key support level of $63.67 — its low from December last year and June this year. That level was significant because it coincided with the neckline of the head-and-shoulders pattern — a three-peak chart formation, named for its resemblance to a head between two shoulders, whose neckline connects the lows between those peaks.

The stock has also fallen below its 50-day Exponential Moving Average (EMA) and has dropped beneath the Parabolic SAR indicator, a sign that bears have prevailed. Based on this setup, the stock will likely continue falling in the coming days, with the next important level to watch at $33.47, its all-time low — roughly 28% below the current price.

Earnings in Focus as AI Jitters Persist

CRWV has been in a steep sell-off this year, making it one of the worst-performing companies in the Nasdaq 100 Index. The decline deepened after Democrats won the House of Representatives and the Senate, with investors fearing that the party will increase scrutiny of the AI industry and impose more stringent regulations.

Concerns about overcapacity in the compute industry have added to the pressure. Reporting by Bloomberg shows that Microsoft has started turning off rented capacity from Oracle as part of a broader reassessment of its multi-billion-dollar deals. Because Microsoft is one of CoreWeave's biggest clients — accounting for 62% of its revenue in 2024, according to filings from its 2025 IPO — there is a likelihood that it may not renew some of its contracts with CoreWeave.

Looking ahead, CoreWeave will publish its earnings on November 10. Yahoo Finance data shows that the consensus expectation is for revenue to have risen 160% in the third quarter to $3.54 billion. Forward guidance for the fourth quarter points to revenue of $4.6 billion, bringing the annual figure to $12.87 billion — strong numbers considering annual revenue stood at $5.13 billion last year.

The results will also provide more detail on the company's backlog — contracted revenue booked for future delivery. In its last result, CoreWeave said its backlog stood at more than $104 billion, making it the biggest neocloud — the label for specialist providers of GPU-powered cloud capacity — in the industry. Competition in the space, however, has continued to grow: Nscale, a British company, has already signed deals worth over $100 billion, while Nebius, IREN, and Riot Platforms have all announced large deals this year.

Debt remains another headwind, as the cost of CoreWeave's data center rollout has pushed its total debt to close to $30 billion, and that figure may continue to grow. Depreciation is also drawing attention: Gartner, the technology research and advisory firm, expects neoclouds to announce large impairments in the future, and a key issue concerns the useful life of the GPUs in its data centers. While the company estimates a useful life of six years, Michael Burry — the investor best known for betting against the US housing market ahead of the 2008 financial crisis — has warned that the introduction of new advanced GPUs will lead to faster depreciation.

These fears help explain why the stock carries a large short interest of 14%, a sign that investors expect the shares to fall further.

This article is for informational purposes only and does not constitute investment advice. Stock investments carry financial risks, and price projections are uncertain.

This article originally appeared on The Market Periodical.