CoreWeave (CRWV) stock surged as much as 25% on Wednesday after the neocloud infrastructure provider reported better-than-expected quarterly revenue and raised its revenue outlook, fueled by booming customer demand for AI compute capacity.
The company highlighted $9 billion in customer prepayments and deposits expected in the next three months, and said it does not plan to take on more expensive debt through 2027, easing concerns about how it will fund its expansion.
“Demand for compute is growing faster than the capacity to deliver that infrastructure and that is being echoed by the expansion of the margins that we are seeing on each additional contract,” CoreWeave co-founder and CEO Michael Intrator said during the company’s earnings call on Tuesday after the bell.
The company reported $3.66 billion in third quarter revenue versus consensus estimates of $3.56 billion, according to Bloomberg data. CoreWeave’s loss per share of $1.27 came in narrower than the $1.46 expected by Wall Street. The company also raised its full-year revenue guidance to $13 billion to $13.3 billion, up from a prior target of $12 billion to $13 billion.
60.77 +12.04 (+24.71%)
At close: November 11 at 4:00:01 PM EST
54.94 -5.83 (-9.59%)
CoreWeave stock has been battered in recent weeks, dropping more than 40% over the past month amid growing concerns about AI financing. A chart that went viral in October showed CoreWeave’s spiking bond yields, underscoring concerns about the company’s debt-heavy balance sheet and whether it can scale its business quickly enough to cover rising interest expenses.
Amid the sell-off, Nvidia (NVDA) CEO Jensen Huang tried to ease concerns about the company’s debt-heavy balance sheet by stating he was “optimistic” and that its “cost of capital is actually decreasing.”
Ines Ferre is a senior business reporter for Yahoo Finance.
Source: finance.yahoo.com
