CoreWeave Reports Strong Q3 Results Despite Stock Decline

CoreWeave Inc., a company specializing in artificial intelligence compute infrastructure, reported third-quarter results that exceeded expectations. Despite this, the company experienced a decline in its stock price during after-hours trading, primarily due to a conservative revenue forecast and delays with a third-party developer on a crucial data center facility.

The company posted a third-quarter loss of 22 cents per share before certain costs, significantly outperforming Wall Street’s estimate of a 40-cent loss per share. CoreWeave’s revenue surged by 134% to $1.36 billion, surpassing analyst expectations of $1.29 billion. This impressive growth resulted in a narrowed net loss of $110 million, compared to a loss of $360 million in the same quarter last year.

Company Outlook and Challenges

CoreWeave’s Chief Executive Officer, Michael Intrator, attributed the company’s strong performance to disciplined execution across various business sectors. He stated, “CoreWeave’s position as the essential cloud for AI has never been stronger as we drive growth through focus and innovation to power the next generation of AI.”

The company’s fortunes are closely linked to the booming AI sector. CoreWeave specializes in renting access to Nvidia Corp.’s graphics processing units and has secured substantial contracts with major cloud providers, including Microsoft Corp. and Google LLC. As of the end of the quarter, the company reported a backlog of $55.6 billion, with 2.9 gigawatts in power under contract, an increase from 2.2 gigawatts three months prior.

During the quarter, CoreWeave made headlines with a $6.5 billion expansion of its partnership with OpenAI Group PBC. The company also entered a six-year agreement with Meta Platforms Inc., potentially worth up to $14.2 billion, along with another contract from an undisclosed major cloud provider.

Despite these advancements, Intrator acknowledged that the company is currently “supply constrained.” He noted that delays in construction at one of its “powered-shell” data centers are affecting operations but reassured analysts that the backlog would not be impacted, as the customer involved has agreed to adjust its delivery schedule.

Market Response and Future Plans

The company provided a full-year revenue forecast between $5.05 billion and $5.15 billion, falling short of Wall Street’s target of $5.29 billion. Since going public on the Nasdaq in March, CoreWeave’s stock has seen considerable volatility. It initially closed at $105.61, marking a gain of over 165%, but fell nearly 6% in late trading.

CoreWeave faced challenges outside its operations as well. Recently, shareholders of data center infrastructure company Core Scientific Inc. voted against a $9 billion acquisition offer, citing it as undervalued. CoreWeave chose not to increase its bid, resulting in the termination of the deal. In response, the company stated, “We respect the decision of Core Scientific’s stockholders regarding our previously announced merger agreement. Our partnership with Core Scientific remains strong and we will continue to execute on shared growth opportunities.”

Looking ahead, CoreWeave plans to invest significantly in capital expenditures. Chief Financial Officer Nitin Agrawal indicated that expenditures for fiscal 2026 would be “well in excess of double” the current forecast of $12 billion to $14 billion.

As the AI sector continues to expand, CoreWeave remains focused on its growth strategy, navigating both obstacles and opportunities in a rapidly evolving market.