CoreWeave Shares Fall 10% As Margins Are Squeezed

CoreWeave stock dropped 10% to about $133 on Tuesday after the AI cloud computing company delivered a weak earnings outlook with thinner-than-expected profit margins, Andrew Nusca reported for Fortune Tech.

CoreWeave managed to triple its Q2 revenue to $1.21 billion, beating Wall Street’s expectations. (Photo: CoreWeave X)

The Northern New Jersey company — which made its market debut in March in the biggest tech IPO since 2021 and has been riding the AI boom — posted massive losses of nearly $131 million for the quarter ended in June.

That’s 20 times its previous quarter’s loss and far worse than analysts had expected.

“We are scaling rapidly as we look to meet the unprecedented demand for AI,” CEO Michael Intrator said.

Like its much larger tech peers Alphabet, Meta, and Microsoft, CoreWeave has spent aggressively to meet AI demand, including its $9 billion acquisition of data center operator Core Scientific and its $6 billion commitment to build a data center in Lancaster, Pennsylvania.

Still, CoreWeave managed to triple its Q2 revenue to $1.21 billion, beating Wall Street’s expectations. The company also raised its full-year revenue outlook to about $5.25 billion as customers use its infrastructure for AI inference.