CoreWeave Inc. (CRWV) shares edged higher on Wednesday, bucking a broader market selloff that saw the Nasdaq-100 drop 1.8% and the S&P 500 fall 0.9%. The move came after CEO Michael Intrator took aim at critics questioning the company's financial structure, calling allegations of improper financing arrangements mathematically nonsensical.

Unpacking the Circular Financing Debate

During a recent podcast appearance, Intrator tackled head-on the notion that CoreWeave is engaged in "circular financing" with Nvidia Corp. He didn't mince words, labeling the entire narrative as "ridiculous." His reasoning? The numbers simply don't support the claim.

Nvidia's $300 million investment might sound substantial in isolation, but it's actually a drop in the bucket compared to CoreWeave's total capital base of over $25 billion. That capital structure supports the company's $42 billion valuation, and Intrator made clear that the math behind circular financing accusations just doesn't add up.

The CEO went further, explaining how CoreWeave's debt strategy actually works. The company uses special purpose vehicles to manage its aggressive borrowing, a structure that ring-fences revenue from major contracts with clients like Microsoft Corp and Meta Platforms Inc. (META). This arrangement ensures that operating expenses and lender obligations get paid first, reducing risk in a way that mirrors traditional infrastructure financing models.

In other words, CoreWeave isn't doing anything exotic. It's applying well-established financing techniques from industries like utilities and telecommunications to the cloud computing space.

Technical Indicators Paint a Mixed Picture

The stock's recent performance tells an interesting story. CoreWeave is currently trading 14.3% above its 20-day simple moving average, suggesting solid near-term momentum. But zoom out a bit, and you'll notice the stock sits 13.6% below its 100-day moving average, pointing to longer-term weakness.

Over the past year, shares have surged 120.61%, and they're currently positioned much closer to their 52-week highs than their lows. That's impressive growth, but it also raises questions about sustainability.

The RSI reading of 55.93 sits squarely in neutral territory, meaning the stock isn't screaming overbought or oversold. Meanwhile, the MACD indicator hovers above its signal line, flashing bullish momentum. Put those two together and you get mixed signals that suggest investors should proceed with caution.

Key levels to watch include resistance at $91.00 and support at $85.00. These thresholds will likely dictate the stock's near-term direction.

Earnings on the Horizon

Investors have their calendars marked for February 14, when CoreWeave reports its next quarterly results. Analysts are expecting a loss of 65 cents per share on revenue of $1.54 billion.

Despite the anticipated loss, Wall Street remains generally optimistic about CoreWeave's prospects. The consensus rating is Buy, with an average price target of $125.52. That suggests analysts see significant upside from current levels, though recent actions show some tempering of expectations.

Barclays maintains an Equal-Weight rating but lowered its target to $90.00. Wells Fargo holds an Overweight rating with a reduced target of $125.00. Truist Securities recently initiated coverage with a Hold rating and an $84.00 target, suggesting more caution than some of its peers.

The High-Flyer Setup

CoreWeave's market position reflects what you might call a "high-flyer" scenario. The momentum score of 83 out of 100 confirms the stock is outperforming the broader market by a wide margin. Investors love momentum, and CoreWeave has it in spades.

But here's the catch: the value score sits at just 7 out of 100. That means CoreWeave is trading at a steep premium relative to its peers, pricing in near-perfect execution going forward. When a stock trades at such elevated valuations, there's limited room for error.

The verdict? This is a stock you might want to ride if you're bullish on the trend, but tight stop-losses are essential. The momentum is real, but so is the downside risk if sentiment shifts or the company stumbles.

ETF Exposure Creates Automatic Trading Pressure

CoreWeave's presence in certain ETFs adds another layer to the trading dynamics. The Tradr 2X Long CRWV Daily ETF carries a whopping 118.53% weight in the stock. The iShares US Digital Infrastructure and Real Estate ETF holds a 4.65% position, while the REX IncomeMax Option Strategy ETF has a 5.05% allocation.

Why does this matter? Because significant inflows or outflows from these funds will trigger automatic buying or selling of CoreWeave shares. When you're heavily weighted in ETFs, your stock price becomes partly driven by fund flows rather than just company fundamentals.

Current Price Action

At the time of publication on Wednesday, CoreWeave shares were up 0.94% at $88.30, holding onto modest gains while broader technology stocks struggled.

The coming weeks will be critical. Between now and the February 14 earnings report, investors will be watching whether the stock can hold its technical support levels and whether management's defense of its financing strategy resonates with the market. For a company trading on momentum with elevated valuations, execution matters more than ever.