CoreWeave stock minted some market winners after an epic 262% run. But the stock's run, aided by market bullishness and positivity around generative AI plays, yielded some hints to investors willing to take more risky bets on a new name.
"CoreWeave was a tricky one," Scott Bennett, founder of InvestWithRules.com, told Investor's Business Daily's "Investing with IBD podcast. "We didn't own it, but it was on our May report and we got the gas signal."
Bennett is referring to a stage on his Trend Roadmap, which considers the combination of short-term and long-term trends of a stock together with a trading signal to determine whether a stock is worth investing.
CoreWeave stock made waves as an AI infrastructure provider that let companies access AI processors on demand. The company, which debuted in late March, partners with Nvidia to provide their top-end hardware. Shares had surged to an all-time high of 166.63 in June, capping off a climb that began in April.
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CoreWeave Stock Works Its Way Through Screeners
Bennett says that CoreWeave stock first gave off positive signals on May 1, according to his screening method. However, by May 14, his signals indicated the stock was "overheated," and he decided to be patient instead of taking a position in the stock. "There's an awful lot of algorithmic trading happening, and at some point, they will flush a stock up higher than we ever think it will go," said Bennett.
When CoreWeave first made its market debut, Bennett says the AI stock quickly made its way through his stock screener, a four-stage analysis method that starts with all U.S. traded stocks, and narrows that large pool down to roughly 600 institutionally held stocks. The list is further winnowed down by stocks with strong performance, earnings growth and relative strength indicators.
Names like CoreWeave stock that make it through this screening method are then scrutinized through a trend road map, which considers short-term and long-term trends as well as his own trading signal to determine the stage a stock is in.
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