CoreWeave Says Demand Is Outstripping Capacity – CFO Defends AI Expansion: ‘Today’s Environment Very Profitable’ For Differentiated Technology

• Third-quarter revenue rose 168%, and backlog increased to $132.5 billion.
• Fears about the durability of data center spending by Big Tech companies and the debt-fueled business models weighed on sentiment for neocloud players.
• Retail sentiment for CRWV flipped to ‘extremely bullish’ from ‘bearish.’

CoreWeave delivered better-than-expected quarterly results and boosted its annual forecasts on Tuesday, reviving investor sentiment amid a difficult stretch for the neocloud sector and sending its shares more than 7% higher in overnight trading.

Shares of peers Iren Ltd (IREN) and Nebius (NBIS) rallied 4.5% and nearly 9% respectively.

Read Next

Michael Burry Sees Nvidia Becoming ‘A Heck Of A Trade’ — Reveals His 2 Biggest Bets And Where He’s Buying More

Deepti Sri

Retail investors and analysts especially praised CoreWeave’s analyst call, where management outlined robust demand for cloud services, said the midterm election results had no impact, and described a coordinated plan to fund capital spending through debt and customer prepayments.

CoreWeave Makes The Case For Sustained AI Demand

“We have 10x as much qualified demand as available capacity through the end of 2027. And demand for 2028 is already several times larger than our available capacity even before we have brought it formally to market,” CoreWeave CEO Michael Intrator said in the earnings call.

“We expect to finance the majority of the remaining CapEx needed to deliver our backlog through delayed draw term loans matched to specific customer contracts. Through 2027, more than 75% of committed CapEx is tied to investment grade and enterprise customers,” he added.

Intrator said he sees no impact from the Democrats’ win in Congress, which many believe will slow data center build out. “We believe that based on the permitting status as well as the construction status of the data centers that our backlog is going to go into, we are very comfortable with our pipeline,” he said.

CoreWeave CFO Nitin Agarwal admitted that the company operated in “a dynamic macro environment,” but argued that “today's environment is very profitable for companies that have demand for their differentiated technology and that can execute." 

CoreWeave Revives Sentiment

In recent months, fears of the durability of data center spending by Big Tech companies and the debt-fueled business models weighed the sentiment for neocloud players. CoreWeave shares dropped over 47% in the last three months. 

“$CRWV After a tumultuous quarter for the stock did a nice job reminding the market that its demand and growth prospects remain quite positive,” The Futurum Group CEO Daniel Newman said in an X post.

“Yes, the growing interests and debt market complexity comes with its own challenges. But the best and raise result coupled with a $133 Billion backlog is far from the end of days crisis portrayed around this stock.”

CoreWeave’s Spending, Losses Still Under Scanner

CoreWeave’s third-quarter revenue jumped 168% to $3.66 billion, but its net loss grew more than six-fold to $709 million. Borrowing costs drove the losses, with net interest expense rising to $846 million from $310 million.

The company’s backlog still climbed to $132.5 billion from $104 billion in June. As such, the company raised its full-year revenue guidance to $13 billion to $13.3 billion and adjusted operation income forecast to $1.275 billion to $1.375 billion.

The spending plan grew as well, with full-year Capex guidance now at $37 billion to $39 billion, up from $35 billion to $39 billion. The quarter closed with about $4.12 billion in cash against nearly $47 billion of debt.

Retail View On CRWV 

CRWV was the top trending stock on Stocktwits at the time of writing, with the retail sentiment for the ticker flipping to ‘extremely bullish’ from ‘bearish.’

“CRWV Excellent call. I think 60s are back on the table.I expect UBS, GS and JPM upgrades or reiterate tomorrow. Future is bright for neoclouds clearly,” said a trader.

Another wrote: “$CRWV everyone's worried about $1B in quarterly interest expense when they have $133B (and growing) of backlogged revenue.”

For updates and corrections, email newsroom[at]stocktwits[dot]com.