CoreWeave (CRWV) delivered its first earnings report as a public company Wednesday evening.
The earnings report revealed robust revenue growth driven by surging AI infrastructure demand—but also exposing a high-risk financial profile that rattled investors.
Shares of the Nvidia-backed (NVDA) AI cloud provider whipsawed Thursday, plummeting 9% early in the session before staging a dramatic reversal and closing the day up more than 22%. The rally came on the heels of CoreWeave’s announcement of a new $4 billion deal with OpenAI and a bullish revenue forecast that outpaced Wall Street expectations.
Yet beneath the surface, CoreWeave’s mounting interest costs and aggressive capital expenditures stirred concerns among analysts. The company plans to spend between $20 billion and $23 billion in 2025—well above the $18.3 billion analysts had projected, according to Bloomberg data.
DA Davidson analyst Gil Luria responded with a rare downgrade, slashing CoreWeave’s rating to Underperform. “This is a company borrowing at extraordinarily high interest rates in order to buy a product that depreciates very rapidly,” Luria told Yahoo Finance, referring to the firm’s GPU-centric business model.
$4 Billion Boost from OpenAI Lifts Guidance
Central to CoreWeave’s bullish revenue outlook is its deepening partnership with OpenAI. In a new 10-Q filing Thursday, the company disclosed a $4 billion cloud services agreement with the AI research firm, adding to an $11.9 billion master commitment signed earlier this year. Combined, OpenAI’s obligations now stretch to nearly $16 billion, fueling optimism about CoreWeave’s forward revenue stream.
As a result, CoreWeave projected second-quarter revenues between $1.06 billion and $1.1 billion, and full-year revenues between $4.9 billion and $5.1 billion—both ahead of consensus estimates. Notably, 72% of CoreWeave’s Q1 revenue came from Microsoft, much of it directed toward supporting OpenAI’s compute needs.
Despite its eye-watering expenditures, investors appeared willing to look past near-term losses in favor of long-term positioning. The company posted a Q1 net loss of $150 million, deeper than the $41.7 million anticipated, yet analysts like Stifel’s Ruben Roy remained upbeat, raising his price target to $75 and reaffirming a Buy rating. “We continue to view CRWV’s longer-term prospects positively given the company’s first-to-market positioning as a purpose-built AI infrastructure provider,” Roy wrote.
Capital Intensity Raises Red Flags Across Tech
CoreWeave’s strategy mirrors a broader trend among tech giants racing to build AI-ready infrastructure. Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG), and Meta (META) have all pledged tens of billions in capex for 2025—budgets that are straining margins and shaking investor confidence. In each case, stock prices dipped following those announcements.
CoreWeave’s strategy mirrors a broader trend among tech giants racing to build AI-ready infrastructure. Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG), and Meta (META) have all pledged tens of billions in capex for 2025—budgets that are straining margins and shaking investor confidence. In each case, stock prices dipped following those announcements.
Still, CoreWeave stands apart as a “picks and shovels” play on the AI boom, renting access to its Nvidia-powered servers rather than developing proprietary AI products. Its dependency on Nvidia runs deep: the chipmaker owns a significant equity stake and recently disclosed it added 24 million shares in its latest 13F filing.
That relationship is mutually beneficial. Melius Research analyst Ben Reitzes noted that CoreWeave’s capex push could be a windfall for Nvidia’s upcoming GB200 and GB300 processors, helping the chipmaker extend its data center growth story well into 2026.
To finance its infrastructure spree, CoreWeave is reportedly in talks to raise $1.5 billion in high-yield bonds. That follows its downsized $1.5 billion IPO in March—far short of its $4 billion target—suggesting investors remain wary of the firm’s balance sheet, which now carries around $12 billion in debt.
Despite those risks, CoreWeave’s stock has soared more than 68% since its debut, reflecting investor enthusiasm for anything tied to generative AI.
As the market begins to digest the financial complexities behind the AI revolution, CoreWeave’s first quarter as a public company serves as a high-stakes case study in balancing explosive growth with fiscal prudence.
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