CoreWeave, a prominent player in the cloud computing sector, witnessed a 9% drop in its shares during extended trading on Tuesday. The biggest surprise was the company’s revenue guidance, which sailed above Wall Street consensus. Even with a top growth rate of 174%, it still saw a loss. Per-CEO Mike Intrator, who co-founded the firm, it’s projecting $5.15 billion to $5.35 billion in revenues for 2025. This projection only scratches the surface of the incredible demand for its services.
The company’s strong growth continues to be limited by capacity constraints. As long as demand for CoreWeave’s services continues to outpace the supply they can provide, further investments and expansions will be needed to keep up. As competition heats up in the JEDI market CoreWeave is taking smart steps to cement its market lead. The company just this month bought Weights and Biases, a startup making AI model monitoring software, for $1.4 billion. This acquisition will better position CoreWeave for success in this rapidly evolving AI landscape.
Beyond its acquisition spree, CoreWeave is making headlines for progress on a $2.7 billion, 800-acre data center campus in New Jersey. This proving ground facility has the goal of providing up to 250 megawatts of power by 2026. Specifically, it would help address the capacity issues that the company is already experiencing. The project is an example of CoreWeave’s focus on rapidly growing its infrastructure to address unprecedented demand.
Even with these advancements, CoreWeave had a net loss of $290.5 million. On top of that, the company is now weighed down by a great $11.1 billion debt. The company’s market cap is still strong – above $72 billion – reflecting a very high level of investor confidence in the company’s long-term potential. As of Tuesday’s close, CoreWeave’s stock would have market capitalized the company at $148.75.
Analysts remain cautiously optimistic about CoreWeave’s trajectory. The firm’s impressive growth rate and forward-looking revenue projections hint at significant recovery prospects for its stock performance. The significant debt load and recent net losses may pose challenges as the company strives to balance growth with financial stability.