Reporting earnings for the first time as a public company, CoreWeave reported revenue that handily beat Wall Street estimates. CoreWeave stock dipped on Thursday amid higher-than-expected capital spending in 2025 tied to new customer contracts.
A cloud computing services provider, CoreWeave crunches artificial intelligence workloads on Nvidia accelerator-equipped servers.
On the stock market today, CoreWeave stock whipsawed to gains and losses as bullish and bearish analysts mulled Q1 results. In morning action, CoreWeave stock was up 5.4% to near 71.
Analyst Reaction To Q1 Results
"CoreWeave posted strong financial results in Q1, blowing past consensus expectations for revenue by nearly 15%," said Nick Del Deo, analyst at MoffettNathanson in a report. "Management also made bullish comments about the demand environment, highlighting that it signed a $4 billion contract expansion after quarter end and noting that it landed a new hyperscaler (presumably Alphabet)."
Del Deo added: "But the cost of preparing to meet this demand may spook investors paying a premium multiple for the stock, with the outlook for capex over the remainder of the year above consensus and the outlook for adjusted operating income below."
At Deutsche Bank, analyst Brad Zelnick maintains a neutral rating post Q1-earnings.
"While the results and new signings benefit the top line, the investments required to fund this hypergrowth result in greater capex, interest
expense, and negative revision to our fiscal 2025 and 2026 cumulative net income by $0.8 billion. While a good problem to have (for now), near-term profitability is depressed by the cost of serving incremental demand."
Higher capital sending will impact financial metrics, said Morgan Stanley analyst Keith Weiss in a report.
"The net result is likely a significant reduction in consensus free cash flow (or an increase in expected cash burn) in the coming year, suggesting higher levels of net debt in the out years," he said.
CoreWeave Stock: Q1 Revenue Beats
Meanwhile, CoreWeave said it posted a loss of $1.49 per share, including stock-based compensation tied to the IPO, versus a 62-cent per share loss a year earlier.
Revenue rose 420% to $981 million, the company said. Wall Street analysts predicted a 12-cent loss for CoreWeave stock in the March quarter with revenue of $857. 1 million.
On its earnings call with Wall Street analysts, CoreWeave said it expects 2025 revenue of $5 billion at the midpoint of guidance, topping estimates of $4.656 billion. Guidance includes the Q1 beat.
Also, CoreWeave predicted capital spending in a range of $20 billion to $23 billion, well above estimates of $18.35 billion.
CoreWeave launched its initial public offering in late March. Heading into the CoreWeave earnings report, shares traded about 57% above the IPO offer price of 40.
CoreWeave Earnings: OpenAI New Customer
CoreWeave's biggest customer is Microsoft, followed by Meta Platforms. Microsoft is the biggest investor in generative AI startup OpenAI, which is the leader in building AI models and launched ChatGPT.
CoreWeave has signed its own multi-year deal with OpenAI. CoreWeave told analysts that remaining performance obligations — signed contracts that don't yet generate revenue—fell to $14.7 billion from $15.1 billion at the end of 2024. But that excludes OpenAI.
Further, CoreWeave and the other cloud infrastructure startups rent specially designed computer servers to artificial intelligence app developers. Nvidia owns a 5% stake in CoreWeave.
While some analysts project a big AI market opportunity for CoreWeave, others fret about customer concentration and $8.5 billion in debt. From an accounting view, high depreciation on data center servers is another concern because it lowers earnings.
The IPO raised $1.5 billion. After a scaled-back IPO, CoreWeave is now expected to raise $1.5 billion in a new bond offering.
In early May, CoreWeave completed the $1.7 billion acquisition of Weights & Biases, which operates an AI developer platform.
CoreWeave Stock: Technical Ratings
CoreWeave was founded as a cryptocurrency miner in 2017 before its move into cloud computing services.
Meanwhile, CoreWeave stock owns a Relative Strength rating of 98 out of a best possible 99, according to IBD Stock Checkup. Also, CoreWeave stock has a relatively small float, making it more volatile.
Additionally, CoreWeave is among the top AI stocks to watch.
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