CoreWeave, a major player in AI infrastructure, saw its shares drop significantly on Tuesday. This decline happened even as the company announced impressive new partnerships with tech giants like OpenAI, Meta, and Nvidia. Investors reacted negatively to a weaker-than-expected forecast for the upcoming year.
Key Takeaways
- CoreWeave shares fell 9% in premarket trading.
- The company reported strong Q3 revenue of $1.36 billion.
- New AI deals totaled over $27 billion with OpenAI, Meta, and Nvidia.
- Full-year 2025 revenue guidance missed analyst expectations.
- Construction delays at a data center are a primary reason for the lowered outlook.
Third Quarter Shows Strong Growth
CoreWeave's third-quarter results painted a picture of rapid expansion. The company reported revenue of $1.36 billion, surpassing analyst predictions of around $1.29 billion. This marks a substantial 134% increase compared to the same period last year. The net loss also saw an improvement, narrowing to $110 million from approximately $360 million previously.
This growth was largely fueled by new contracts designed to meet the surging demand for artificial intelligence infrastructure. These deals highlight CoreWeave's crucial role in supporting the advanced computing needs of leading AI developers.
Key Financials
- Q3 Revenue: $1.36 billion
- Year-over-year Growth: 134%
- Net Loss: $110 million (down from $360 million)
Major AI Partnerships Announced
In a series of significant announcements, CoreWeave revealed new and expanded partnerships with some of the biggest names in technology. These agreements underscore the company's strategic position in the AI market.
- An expanded business deal with OpenAI is valued at $6.5 billion.
- A six-year agreement with Meta could reach up to $14.2 billion.
- A $6.3 billion deal with Nvidia will provide cloud computing capacity.
These contracts represent a combined value exceeding $27 billion, signaling strong demand for CoreWeave's specialized AI cloud services. Despite these impressive bookings, the market reacted with caution, focusing instead on future projections.
Outlook for 2025 Falls Short
Despite the strong third-quarter performance and new deals, CoreWeave's full-year revenue forecast for 2025 disappointed investors. The company projected revenue between $5.05 billion and $5.15 billion. This range falls below the average analyst estimate of $5.29 billion.
This revised outlook led to a 9% drop in CoreWeave shares during premarket trading. The market's focus shifted from past successes to potential headwinds in the coming year.
"There was a problem at one data center that’s impacting us, but there are 41 data centers in our portfolio," said Mike Intrator, CoreWeave's chief executive. He explained the impact of construction delays on the company's near-term outlook.
Understanding Data Center Constraints
CoreWeave specializes in providing high-performance computing for AI workloads. This requires significant infrastructure, particularly data centers equipped with specialized hardware. Delays in building or equipping these facilities can directly impact the company's ability to serve clients and generate revenue.
Challenges in Data Center Infrastructure
Chief executive Mike Intrator addressed the reasons behind the conservative 2025 forecast during a call with investors. He highlighted construction delays at one of the company's data centers as a key factor. While acknowledging the issue, he emphasized that this is an isolated incident within their larger portfolio of 41 data centers.
Intrator also pointed to a broader industry challenge: the availability of "powered-shell" data centers. These are facilities that are partially built, requiring CoreWeave to install its own computing equipment. "There’s plenty of power right now, and we believe that there will be ample power for the next couple of years. But really where the challenge is, is the powered shell," Intrator stated.
Addressing Delays and Future Plans
To mitigate these infrastructure challenges, CoreWeave is actively building its own data center infrastructure in Pennsylvania. The company expects the majority of the current delay issues to be resolved early next year, specifically within the first quarter.
Looking further ahead, finance chief Nitin Agrawal indicated a significant increase in capital spending for 2026. He projected that capital expenditure will be "well in excess of double" this year's estimated $12 billion to $14 billion. This aggressive spending plan suggests the company's long-term commitment to expanding its capacity despite current setbacks.
Future Capital Expenditure
CoreWeave estimates 2026 capital spending will be more than double the $12 billion to $14 billion projected for this year, reflecting aggressive expansion plans.
Recent Acquisition Attempt Failed
In October, CoreWeave's proposed acquisition of data center operator Core Scientific for $9 billion did not materialize. Shareholders of Core Scientific rejected the offer, meaning CoreWeave will need to pursue other avenues for expanding its physical infrastructure.
This rejection adds another layer of complexity to CoreWeave's plans for scaling its operations. The company must now rely more heavily on its internal build-out and securing powered-shell facilities to meet the escalating demand from the AI sector.
