- Jeffrey Emanuel called Nvidia overvalued and warned of DeepSeek’s rise
- His essay went viral, triggering record market losses and investor panic
- Now he’s targeting CoreWeave, calling it a turkey and the “WeWork of AI”
Towards the end of January 2025, Jeffrey Emanuel, Founder and CEO of Pastel Network, wrote an interesting and insightful essay about Nvidia.
More specifically, he discussed what he saw as its overvaluation and the threat it faced from a small Chinese startup called DeepSeek. noting, “history shows that markets eventually find a way around artificial bottlenecks that generate super-normal profits,” and that, “Nvidia faces a much rockier path to maintaining its current growth trajectory and margins than its valuation implies.”
That article, which went viral, helped cause the largest-ever single-day drop in the stock market, wiping $2 trillion off global markets and slashing Nvidia’s market capitalization by $600 billion.
An overpriced turkey
The latest target of Emanuel’s observations is Roseland, New Jersey-based CoreWeave, which offers cloud infrastructure optimized for Nvidia GPUs and is expected to go public in the coming weeks in what will be a closely watched IPO.
In his takedown of the company, Emanuel described it as the “WeWork of AI,” referring to the infamous flexible office space startup that was once valued at $47 billion but overexpanded, mismanaged funds, and collapsed after a failed IPO.
As Emanuel wrote two weeks ago, “If it [CoreWeave] really IPOs for $30b+ then it’s a much better short than NVDA ever was. They have absolutely no durable moat and will soon be structurally disadvantaged on the cost curve for inference for specific LLM models versus hyperscalers like AWS, which have their own proprietary silicon (because clearly CoreWeave doesn’t know the first thing about making custom silicon, and won’t anytime soon).”
MarketWatch picked up on this and cautioned investors. The site wrote, “CoreWeave set an estimated price range of $47 to $55 a share for its initial public offering, and an offering size of 49 million shares. Based on the midpoint of the estimated range, CoreWeave’s IPO would raise $2.5 billion for the company. That would make its IPO the fourth since 2022 to raise at least $2.5 billion, after Lineage, Arm Holdings, and Kenvue, according to Renaissance Capital.”
“CoreWeave would have a market cap of about $25 billion based on the midpoint of the estimated pricing range,” the site added. While that’s far less than the $35 billion many market watchers have been predicting, Emanuel says, “that’s still at least $20b too high for this turkey!”
Thanks to Steve Gelsi at @MarketWatch for helping me warn investors about the CoreWeave IPO. Luckily, they’ve already had to reduce the valuation by $10b from the initial price talk of $35b, but that’s still at least $20b too high for this turkey! https://t.co/fnJorj87NkMarch 20, 2025
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