CoreWeave Inc (NASDAQ:CRWV) stock plunged 9.82% during Wednesday pre-market, after its second quarter revenue exceeded projections but earnings per share (EPS) falling short.
CoreWeave Beats Revenue Estimates But Posts Wider Loss
The company reported a revenue of $1.21 billion for the second quarter, surpassing the $1.08 billion estimated by analysts. However, CoreWeave’s adjusted loss per share for the quarter was 27 cents, missing the anticipated 17 cents per share loss.
The company’s operating margin fell from 20% to 2% over the past year, mainly due to $145 million in stock-based compensation, while its debt rose to $11.1 billion.
CoreWeave's revenue jumped 300% year-over-year, with a $30.1 billion backlog, $1.19 billion in operating expenses, and $1.15 billion in cash by quarter's end.
CEO and co-founder Michael Intrator commented, “Our strong second-quarter performance demonstrates continued momentum across every dimension of our business. We are scaling rapidly as we look to meet the unprecedented demand for AI.”
The shares also fell after-hours on Tuesday. “Demand is humming, but it is the cost of growth that tempered the stock down in aftermarket trading,” Michael Ashley Schulman from Running Point Capital Advisors told Reuters.
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CoreWeave’s AI Growth Faces Shareholder Pushback
CoreWeave, a data center operator in the U.S. and Europe since 2017, went public on Nasdaq in March at $40 per share, offering Nvidia (NASDAQ:NVDA) GPU access to major tech and AI companies.
The company’s Q2 results reflect the company’s resilience and growth in the face of increasing demand for AI and technology services. This demand has been a driving force behind the company’s significant investments in AI infrastructure in the U.S. and its subsequent proposed acquisition of Core Scientific.
However, the acquisition has faced opposition from shareholders like Two Seas Capital, who argue that the deal undervalues Core Scientific and exposes shareholders to undue risk.
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