By Juby Babu and Krystal Hu (Reuters) -CoreWeave easily topped quarterly revenue estimates on Tuesday as the rapid adoption of artificial intelligence tools boosted demand for its cloud services, but
CoreWeave Surpasses Revenue Estimates Amid AI Surge, Shares Decline
CoreWeave's Financial Performance and Market Response
By Juby Babu and Krystal Hu
Revenue and Backlog Highlights
(Reuters) -CoreWeave easily topped quarterly revenue estimates on Tuesday as the rapid adoption of artificial intelligence tools boosted demand for its cloud services, but a bigger-than-expected net loss sent its shares slumping 10% after the bell.
Operating Expenses and Net Loss
The company currently operates 33 AI data centers across the U.S. and Europe and offers access to backer Nvidia's chips, which are highly coveted by enterprises to train and run large AI models amid intense competition.
Future Outlook and Investor Sentiment
CoreWeave posted second-quarter revenue of $1.21 billion, beating estimates of $1.08 billion. It also reported a revenue backlog of $30.1 billion as of the end of June, compared with $25.9 billion on March 31.
"Demand is humming, but it is the cost of growth that tempered the stock down in aftermarket trading," said Michael Ashley Schulman of Running Point Capital Advisors.
Operating expenses jumped to $1.19 billion in the second quarter, from $317.7 million a year earlier.
The company posted a net loss of $290.5 million, compared with analysts' average estimate of $190.6 million, according to data compiled by LSEG.
"We are scaling rapidly as we look to meet the unprecedented demand for AI," CEO Michael Intrator said. "There's a lot of different pieces that are constrained, but ultimately the piece that is the most significant challenge right now is accessing power shells that are capable of delivering the scale of infrastructure that our clients are requiring."
The company reiterated the benefits of its $9 billion all-stock deal for crypto miner Core Scientific, which will help it secure the firm's entire 1.3 GW power under contract and future pipeline. The comment comes as Two Seas Capital, the largest shareholder of Core Scientific, said last week it would vote against the sale.
Investors have also focused on the company's reliance on a few big customers. CoreWeave said it has also expanded contracts with hyperscalers in the past few weeks to meet their growing internal and external demand.
"The backlog surge to $30B+ suggests demand visibility well beyond 2025, but the concentration in mega-customers like OpenAI means those relationships remain both the crown jewel and the single point of failure," said eMarketer analyst Jeremy Goldman.
CoreWeave has seen rising demand for AI inference, especially when models use chain-of-thought reasoning to go through a problem in a logical sequence — a technique doubled down on by frontier labs such as OpenAI.
"The actual quality of the intelligence was improved so much by the chain-of-reasoning models, but it also requires an incredible increase in the amount of computing to be able to drive that level of accuracy," Intrator said in an interview.
The Livingston, New Jersey-based company raised its annual revenue forecast to be between $5.15 billion and $5.35 billion. It had previously projected $4.9 billion to $5.1 billion.
Shares of the company, which reaffirmed its annual capital expenditure projection, were trading at $133.71 after hours. The stock has gained nearly three-fold since the IPO in March.
(Reporting by Juby Babu in Mexico City and Krystal Hu in New York; Editing by Sriraj Kalluvila and Alan Barona)
