AMDC

By David Weidner

Stop listening to market pundits and start looking at market performance

CoreWeave's problems might be just that: its own.

Last week, CoreWeave sneezed, the market caught a cold, and everyone became a doctor delivering a diagnosis: Either the patient is going to die or become stronger than ever.

What happened is one of Wall Street's most predictable shows. The market blip was followed by extreme points of view that investors should neither fully heed nor trust. I'll be blunt: It's not that these loud voices aren't experts - they are. It's just that they're experts in running their own books. "Go West, fellow investor!" they shout, as they short California and buy the East.

And let's face it, they had the opportunity. The audience was scared. For the week that ended Oct. 16, the Nasdaq Composite COMP fell 4.5% to seal its worst week since June. The S&P 500 SPX fell nearly 2%, also logging its worst week since June. CoreWeave's stock (CRWV) itself fell 25%.

See also: 3 big reasons Micron and other chip stocks fell hard on Thursday

In the days since, the Nasdaq and the S&P 500 have both continued their slide. Any reasonable investor would be trying to make sense of that. Welcome to October on Wall Street.

"Red October" is a thing: the Panic of 1907; Black Thursday (Oct. 24, 1929); Black Monday (Oct. 19, 1987); and Oct. 6-10, 2008, which was the worst week for the Dow Jones Industrial Average DJIA ever, with an 18% drop.

Fear and greed vs. reality

Investors freak out in October, but that doesn't always mean they should. Some of those events were followed by swift recoveries. Some, like 1987, were corrections. Others were the start of something much worse. Telling them apart in real time is the hard part. But the point is that, usually, these events hit when things are hot and they need to cool.

That could be what's happening here. Let's look at recent returns with a couple of data points in mind. First, the Nasdaq Composite has returned roughly 18.5% annually with dividends in the last decade. That figure has been about 15% for the S&P 500. Historically, the market has returned 10% on a nominal basis. Stocks have been returning 1.5x or more. That's a historic bull run.

And even with the recent pullback, this year is no exception. The Nasdaq and the S&P 500 have each returned 12% so far this year; in the last 52 weeks, their returns have exceeded 14%. Find me an era when investors were whining about that. I'll wait.

Stocks have been a great place to put money since the financial crisis. Except for the rate-hike-driven stall in 2022, investors could close their eyes and cover their ears, buy an index fund and, in 10 years, remove their hands and walk into the investor club with the confidence of Warren Buffett. It's been that easy.

Are structural problems and AI a threat?

Today, Wall Street broadly agrees that artificial intelligence will determine the next five to 10 years. Simply put, it's a race between the potential profit unlock it promises and the massive debt it must pay down. It's a burn-rate story; you either believe it or you don't. And even if you don't, there's money to be made as valuations rise. Investors just need to time their exits.

A story like CoreWeave was bound to happen. There's always a CoreWeave or a Bear Stearns (2007) or a Global Crossing or a WorldCom (both in 2002) that was playing a game everyone else was, but either took it to an extreme or just got caught exposed first.

The case for CoreWeave as canary is strong: Nearly $500 billion in AI-related debt was issued through the first seven months of 2026, according to Goldman Sachs, while data-center lease agreements now total more than $1 trillion, according to Moody's. And more could be coming.

As Buffett once said, when the tide goes out, we find out who was swimming naked. CoreWeave may be swimming next to the shore, for all we know.

On the flip side, CoreWeave's debt problems could be just that: CoreWeave's alone.

If so, that would mean there's enough time for AI spending to pay off; that lenders and investors were right; and that everything, as some argue, is underpriced - even though that price has risen between 11% and 14% in the last year.

Along the way, market dips (and sometimes surges) present opportunities for big investors like Michael Burry or prominent analysts like Dan Ives to say something influential. We in the media love people like Burry and Ives; they won big pots at this game, and we remember. The caveat is: That was then, and this is now.

To be clear, this isn't to impugn anyone for their opinions and advice, nor is it to cast aspersions on their motives, which I assume are good and not influenced by their interests (though that would be stupid, if you think about it). Moreover, many of Wall Street's pundits have been right - some of them twice.

But there is a difference between a watershed event and simply a selloff caused by a company that reminded us this isn't a kids' soccer game where every company gets a trophy. We've had a good run in the market; we're still in the middle of one. These things happen, and then people sell you something. That's where we're at - it's just a cold.

-David Weidner

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10-22-26 1854ET