"Nvidia protégé CoreWeave widened its loss and gave a weak outlook. Shares plummeted

CoreWeave, a provider of cloud infrastructure for artificial intelligence, reported a significant increase in its loss last quarter and gave a weak revenue forecast for the current quarter. This prompted investors to sell shares of the company, which has become one of the main beneficiaries of the "AI revolution": the stock plummeted by 12% on the premarket on February 27.

At the end of the fourth quarter of 2025, CoreWeave's revenue grew 110% year-over-year to $1.57 billion versus analysts' expectations of $1.55 billion, CNBC reports. Revenue for all of 2025 amounted to $5.1 billion - 2.7 times more than it was in 2024.

At the same time, the company increased its loss: last quarter it amounted to $452 million or $0.89 per share. For comparison: analysts predicted an average of $342 million or $0.49 per share, noted CNBC. In the same period in 2024, the loss amounted to $51 million.

CoreWeave expects its revenue in the first quarter of 2026 to be in the range of $1.9 billion to $2 billion, CNBC reported. Analysts on average had forecast $2.29 billion, the channel cited LSEG data. For the full year 2026, CoreWeave expects revenue in the range of $12 billion to $13 billion, broadly in line with the consensus view of $12.09 billion, CNBC added.

At the same time, CoreWeave has planned a dramatic - roughly threefold - increase in capital expenditures in 2026: to $30-35 billion, up from $10.31 billion in 2025. The company aims to end 2026 with more than 1.7 gigawatts of active capacity - more than the Visible Alpha consensus of 1.59 gigawatts. In addition, CoreWeave wants to additionally secure more than 5 gigawatts of new energy capacity by 2030 - on top of its existing contracts, CNBC noted.

CoreWeave shares were 12% cheaper at the premarket on February 27. Core trades a day earlier ended with a slight decline of 0.4% to $97.63. Before the collapse on Friday, the securities were one-third more expensive than they were at the beginning of 2026.

Demand for CoreWeave products remains strong, MarketWatch notes. The backlog, which mostly includes contracts with customers such as Microsoft and Meta Platforms, grew to $66.8 billion, up from $55.6 billion at the end of the third quarter.

CoreWeave's debt was $21.37 billion as of Dec. 31, 2025. The company raises debt to fund capital expenditures that support revenue growth, then repeats the cycle, Barron's notes. In the fourth quarter, 25% of revenue was used to pay interest on debt - a significant driver of the company's losses, the publication notes.

The cost of building the large data centers needed to house Nvidia's high-performance chips also continues to put significant pressure on the company's profits, MarketWatch notes. CoreWeave has a close partnership with Nvidia: its data centers exclusively use the vendor's hardware, and Nvidia itself acts as both an investor, customer and key supplier to CoreWeave, Barron's notes.

"2025 was a defining year for CoreWeave as we became the fastest growing cloud company in history, reaching $5 billion in annual revenue," said CoreWeave CEO Mike Intrator.

"Right now CoreWeave is being penalized by the market for either too low or too high capex. That the company is not having trouble bringing new capacity online - which is what explains the high capex - is a positive signal," Reuters quoted D.A. Davidson analyst Alexander Platt as saying.

Out of 29 analysts covering the company's shares, 15 advise to buy the securities, 13 are cautious and recommend to keep them in the portfolio. One advises to sell.

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