Stansberry argued that CoreWeave’s rapid revenue growth and heavy spending on data-center infrastructure resemble the hypothetical business Bezos described, more than they resemble Amazon’s early expansion.

  • Stansberry contrasted CoreWeave’s second-quarter financial metrics with Amazon’s early capital spending, arguing that its investments in warehouses and fulfillment centers helped support a growing customer base.
  • He also pointed to Amazon’s operating cash flow, which turned positive after several years of investment, while arguing that CoreWeave has continued to consume significant amounts of cash as it expands.
  • Stansberry also highlighted the difference between the assets Amazon accumulated during its early expansion and the computing equipment CoreWeave uses to provide AI infrastructure.

Porter Stansberry, former CEO of MarketWise, drew a connection between CoreWeave Inc. (CRWV) and a hypothetical transportation machine Jeff Bezos described in Amazon.com Inc.’s (AMZN) shareholder letter in 2004 to illustrate the risks of capital-intensive businesses.

In a series of posts on X, Stansberry argued that CoreWeave’s rapid revenue growth and heavy spending on data-center infrastructure resemble the hypothetical business Bezos described, more than they resemble Amazon’s early expansion.

However, “The Big Short” investor Michael Burry responded, saying, “Jeff Bezos is so freakin smart yes, and Porter not far behind it seems. I do not believe Jeff shorted $CRWV. No one like him needs to die on a short hill.”

CoreWeave shares were up more than 2% in Thursday morning’s trade.

Stansberry Draws CRWV-AMZN Comparison

Stansberry focused on the amount of capital CoreWeave is deploying to expand its AI infrastructure, arguing that its economics differ from those of Amazon in its early years.

He highlighted CoreWeave’s second-quarter (Q2) revenue of $2.58 billion, along with a $626 million net loss, $1.39 billion in depreciation and $640 million in interest expense.

Stansberry contrasted those figures with Amazon’s early capital spending, arguing that the company’s investments in warehouses and fulfillment centers helped support a growing customer base.

“Why did Amazon succeed with a debt-funded, heavy investment strategy? Because the underlying business is incredibly capital efficient,” Stansberry said.

He also pointed to Amazon’s operating cash flow, which turned positive after several years of investment, while arguing that CoreWeave has continued to consume significant amounts of cash as it expands.

Stansberry Highlights CRWV’s AI Infrastructure Model

Stansberry contrasted Amazon’s early assets with CoreWeave’s computing equipment, highlighting its six-year depreciation period amid Nvidia’s roughly annual GPU architecture updates.

“Six generations of silicon will pass before the chips bought this quarter finish depreciating on CoreWeave’s books,” Stansberry wrote.

He also highlighted CoreWeave’s customer and supplier ties, noting that Microsoft Corp. (MSFT) accounted for 67% of revenue last year, while Nvidia Corp. (NVDA) supplies its GPUs, owns a stake and has agreed to buy unsold capacity through April 2032.

“Why doesn’t Nvidia just build the datacenters?” Stansberry asked. “What’s the purpose of having CoreWeave stand between Nvidia and Microsoft?”

Stansberry also addressed CoreWeave’s $104 billion revenue backlog, arguing that the figure by itself does not establish how much free cash flow the company’s contracted business will produce.

What Bezos Said In His 2004 Letter

In a 2004 letter to Amazon shareholders, Bezos used a hypothetical $160 million transportation machine with a four-year useful life to explain why earnings growth does not necessarily translate into shareholder value.

The machine could handle 100,000 trips annually at $1,000 each, with earnings growing 100% annually to $150 million cumulatively, but generating $530 million in cumulative negative free cash flow over four years.

“Unfortunately our transportation business is fundamentally flawed. There is no growth rate at which it makes sense to invest initial or subsequent capital to operate the business,” he wrote.

Bezos then contrasted the hypothetical business with Amazon, highlighting the company’s focus on free cash flow and capital efficiency. Amazon had $246 million invested in fixed assets at the end of 2004, equivalent to 4% of its sales, while free cash flow grew 38% to $477 million that year.

“Cash flow statements often don’t receive as much attention as they deserve. Discerning investors don’t stop with the income statement,” he wrote.

What Retail Investors Think Of CRWV Stock

Retail sentiment on Stocktwits around CoreWeave trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

CRWV stock is up 54% year-to-date, but down 7% over the past 12 months. The Invesco QQQ Trust (QQQ) is up 26% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 38%.

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