CoreWeave Shares Drop After Larger-Than-Expected Q2 Losses
CoreWeave shares experienced a significant drop of up to 9 percent in after-hours trading on Tuesday, following the artificial intelligence data center operator’s report of second-quarter net losses that surpassed Wall Street’s expectations. The New Jersey-based company, which specializes in leasing computing power to various AI groups, disclosed net losses of $291 million for the quarter ending June, considerably higher than the $241 million analysts had projected. This marks the second earnings report for CoreWeave since its initial public offering earlier this year, which was downsized from its original scope.
Despite the larger-than-anticipated losses, CoreWeave did manage to exceed revenue forecasts, reporting $1.2 billion for the three-month period ending June, surpassing analyst estimates of $1.1 billion. The company’s stock had seen an extraordinary surge since its public debut in March, climbing approximately 270 percent in less than six months. This rapid ascent reflects CoreWeave’s pivotal role in the burgeoning AI sector, securing major contracts with industry leaders such as OpenAI and Microsoft.
CoreWeave’s aggressive growth strategy has been heavily reliant on substantial borrowing, raising billions of dollars to fund the construction of new data centers. This expansion is a direct response to the escalating demand for infrastructure essential to run advanced generative AI models. Michael Intrator, CoreWeave’s co-founder and chief executive, underscored this trajectory, stating, “We are scaling rapidly as we look to meet the unprecedented demand for AI.”
The current week presents a potentially critical juncture for the company, as a share lock-up period is set to expire in the coming days. This expiration will permit early investors to sell their shares for the first time since CoreWeave became publicly traded in March, potentially introducing additional volatility to the stock. CoreWeave’s shares had previously declined after its first quarterly results as a listed company in May, when its guidance for second-quarter operating income — projected between $140 million and $170 million — fell short of Wall Street’s expectations at the time.