"Demand is booming": the hype around AI has led CoreWeave to a multiple of losses

In the highly competitive market for artificial intelligence infrastructure, US-based CoreWeave is enjoying rapid growth, but the cost of that race has started to show in its financial statements. The cloud computing provider for OpenAI and Microsoft reported a rapid rise in quarterly revenue. But a tenfold jump in losses and a cautious outlook for the current quarter crashed CoreWeave's quotes.

CoreWeave revenue reached $1.2 billion in the April-June quarter, tripling year-over-year and beating LSEG' s consensus forecast of $1.08 billion. The jump reflects the explosive growth in AI computing, with developers rushing to train and deploy increasingly sophisticated neural networks. CoreWeave's backlog of contracts increased to $30.1 billion, up from $25.9 billion a quarter earlier and doubling from early 2025.

"Demand is booming," AInvest quotes Michael Ashley Shulman, chief investment officer of Running Point Capital Advisors, as saying of the hype that is driving the cloud computing vendor forward.

But CoreWeave's impressive revenue results are being held back by expenses, which have skyrocketed as the company has had to invest billions of dollars in data centers and infrastructure to keep up with demand. Its adjusted net loss jumped 26-fold to $130.8 million, up from just $5 million a year earlier, and was 36% higher than the $96.3 million the market had expected. Operating expenses soared to $1.2 billion from $317.7 million due to aggressive capital spending.

CoreWeave raised its full-year revenue guidance to $5.15-5.35 billion from its previous range of $4.9-5.1 billion, indicating its confidence in solid growth. However, the company's operating profit target for the current quarter of $160-190 million was below consensus ($192 million). This moderate view of profitability reflects the essence of the current stage in the development of AI infrastructure: the priority is expansion, not margins, which are now being eaten up by capital expenditures, AInvest notes.

Wall Street reacted to CoreWeave's quarterly report with a selloff - the company's 6.4% rise before the report was followed by a 10.35% collapse after the report was released. At the same time, investors should be ready for new shocks: On August 14, the "lockup period" expires, and early investors in CoreWeave will have the right to sell their shares, which have almost quadrupled in price since the IPO in early June, MarketWatch notes.

According to FactSet, the initial enthusiasm for CoreWeave on Wall Street has been replaced by caution: stock analysts now recommend on average to hold its shares (consensus rating of Hold), although three months ago they were advising to buy them - with a consensus rating of "above market" (Overweight).

This article was AI-translated and verified by a human editor