Investors React to CoreWeave's Expansion Plans and Debt

CoreWeave Shares Slide 13% After Wider Loss, Heavy Capex Plan Raises Investor Concerns​

CoreWeave Stock Drops Despite Revenue Beat​

Shares of CoreWeave Inc. fell as much as 13% in extended trading after the AI data center operator reported a wider-than-expected quarterly loss and unveiled a sharply higher capital expenditure plan.

The company posted a loss of $0.89 per share for the December quarter, significantly deeper than the $0.72 per share analysts had projected. Despite the earnings miss, revenue came in stronger than expected at $1.57 billion, surpassing the $1.55 billion estimate.

CoreWeave shares dropped to as low as $84.64 in late trading following the announcement. The stock had closed at $97.63 and was up 36% so far this year before the results.

Capital Spending to Surge to $35 Billion​

CoreWeave said it expects capital spending in 2026 to range between $30 billion and $35 billion, exceeding analyst expectations. The aggressive spending plan underscores the company’s strategy to rapidly scale infrastructure amid surging demand for artificial intelligence computing power.

The company operates large-scale AI data centers and is part of the growing group of so-called neocloud providers that rent high-performance chips and computing resources. It has secured contracts with major technology firms including OpenAI, Meta Platforms Inc. and Microsoft Corp..

However, expansion comes at a steep cost. In November, CoreWeave lowered its annual revenue forecast due to delays in fulfilling a customer contract. The company has increasingly relied on debt financing to fund equipment purchases and infrastructure build-outs.

Chief Executive Officer Mike Intrator said the company borrows only after securing customers for the equipment being financed. He emphasized that lenders would not provide capital without firm commitments from clients such as Microsoft, Meta, Nvidia and Google.

Revenue Outlook and Profitability Guidance​

For the current year, CoreWeave forecast sales of $12 billion to $13 billion, with about $2 billion expected in the first quarter. Analysts had projected full-year revenue of $12.1 billion and first-quarter sales of $2.24 billion.

Adjusted operating income is expected to range from break-even to $40 million.

CoreWeave completed its initial public offering in March 2025 and has drawn strong investor interest as artificial intelligence spending accelerates. The Livingston, New Jersey-based company is also a close partner of Nvidia Corp., the leading AI chipmaker.

Nvidia recently invested an additional $2 billion in CoreWeave to accelerate the expansion of more than 5 gigawatts of AI computing capacity by 2030. As part of the partnership, CoreWeave will be among the first to deploy Nvidia’s upcoming products.

Rising Debt and Cash Burn in Focus​

The company is also seeking to raise approximately $8.5 billion from banks including Morgan Stanley and Mitsubishi UFJ Financial Group Inc. to finance cloud computing infrastructure for Meta.

CoreWeave’s borrowing has surged in recent years as part of a broader industry trend. Its adjusted leverage stood at roughly 6.9 times as of September 30, and the company is expected to burn cash for at least the next 18 months amid elevated capital expenditure, according to a recent Moody’s Ratings report.

While demand for AI infrastructure remains robust, investors appear cautious about the pace of spending, rising debt levels and the timeline to sustainable profitability.