CoreWeave Investors Initiate Legal Action After Data Center Delays Trigger $14 Billion Valuation Collapse

2026-01-22 companies

San Francisco, Wednesday, 21 January 2026.
Cloud infrastructure provider CoreWeave is facing a wave of securities class action lawsuits alleging the company misled shareholders regarding critical infrastructure delays. The central controversy involves the Denton, Texas data center—a key facility intended for OpenAI—where construction setbacks reportedly existed months before public disclosure. While CoreWeave management attributed lowered revenue guidance to temporary third-party issues in November 2025, subsequent reports indicate that development partner Core Scientific had flagged these delays as early as February 2025. This significant transparency gap precipitated a severe volatility event, erasing approximately $14 billion in market capitalization between November and December 2025. Investors are now scrutinizing whether the firm intentionally overstated its operational capacity to protect its stock price following its March 2025 IPO.

The Anatomy of a Valuation Collapse

The legal complaints, filed in the U.S. District Court for the District of New Jersey and the Western District of Texas, center on a specific “Class Period” ranging from CoreWeave’s Initial Public Offering (IPO) on March 28, 2025, through December 15, 2025 [4][6]. Following its IPO, where the company raised $1.5 billion by selling 37.5 million shares at $40.00 each, investor sentiment initially soared, driving the stock price to a peak of $183.58 by June 20, 2025—a 358.95% increase from its debut [6]. However, this growth narrative faced a stark reversal beginning in late 2025. On November 10, 2025, CoreWeave lowered its fiscal year guidance for revenue and active power capacity, attributing the revision to “temporary delays related to a third-party data center developer” [1][2]. This disclosure immediately shook investor confidence, causing the stock to plummet by $17.22 per share, or 16.31%, to close at $88.30 on November 11, 2025 [6][7].

Unearthing the “February” Discrepancy

The situation deteriorated further following a December 15, 2025, report by The Wall Street Journal, which challenged the company’s narrative regarding the timeline of the infrastructure setbacks [1][2]. The report revealed that Core Scientific, the third-party developer responsible for the critical Denton, Texas data center cluster, had been flagging delays to CoreWeave as early as February 2025—nine months prior to CoreWeave’s public admission of “temporary” issues [1][6]. The delays were reportedly driven by necessary design enhancements to optimize GPU performance and adverse weather conditions [1][7]. Following this revelation, CoreWeave shares fell an additional 3.39% to close at $69.50 on December 16, 2025 [6]. In total, between the initial November disclosure and the December fallout, the company’s stock price declined by $36.11 per share, representing a 34% drop that wiped out $14 billion in market capitalization [1].

Operational Realities vs. Investor Expectations

Central to the lawsuits is the allegation that CoreWeave overstated its ability to meet customer demand by concealing these significant construction delays [2][5]. The Denton facility was strategically critical, intended to service a massive contract with OpenAI, a partnership CoreWeave had highlighted as a key growth driver following a deal announced in March 2025 worth up to $11.9 billion [7]. The relationship with the builder, Core Scientific, was further complicated by a failed merger attempt; CoreWeave had announced an agreement to acquire Core Scientific in July 2025, but the deal was terminated on October 30, 2025, after failing to secure sufficient shareholder votes [2][7]. This termination itself acted as a precursor to the volatility, causing an initial stock drop of $8.87 per share in late October [2][6]. The subsequent revelation that the builder had been communicating delays throughout this period suggests a material disconnect between internal operations and external shareholder communications [1][7].

Legal Siege and Financial Outlook

Multiple litigation firms, including Hagens Berman, Pomerantz LLP, and Robbins Geller Rudman & Dowd LLP, are now mobilizing investors who incurred losses during the Class Period [1][6][7]. The lawsuits assert violations of the Securities Exchange Act of 1934, specifically accusing defendants of making materially false and misleading statements regarding the company’s infrastructure deployment and financial prospects [4][6]. Investors have until March 13, 2026, to petition the Court to be appointed as lead plaintiff in the proceedings [1][2]. Beyond the courtroom, financial analysts are reassessing the company’s fundamental stability. Reports indicate that CoreWeave faces pressing risks regarding its liquidity, with some analysis pointing to less than one year of cash runway remaining [5]. While the stock has seen some recent movement, trading at US$95.22, valuation models suggest it may still be trading significantly above its estimated fair value, keeping the company’s valuation under intense scrutiny as the legal battles commence [5].

Sources

Securities Litigation CoreWeave