CoreWeave stock slides after larger-than-expected losses
The high-flying world of artificial intelligence infrastructure is proving to be a costly frontier, as CoreWeave, a prominent data center group that has ridden the wave of AI enthusiasm, saw its shares slide following the announcement of larger-than-expected losses. The company’s Q2 2025 earnings report, released on August 12, revealed a stark contrast between surging demand for its services and the significant financial outlay required to meet it.
CoreWeave, positioning itself as an “AI Hyperscaler,” has benefited immensely from the insatiable demand for GPU-accelerated computing, which underpins the development and deployment of advanced AI models. The company reported a record $1.2 billion in revenue for the second quarter, marking an impressive 207% year-over-year growth and comfortably exceeding analyst expectations. Its contracted backlog also swelled to $30.1 billion as of June 30, including a substantial $4 billion expansion with key client OpenAI, signaling robust future demand. Furthermore, CoreWeave’s adjusted EBITDA reached $753 million, more than tripling from the previous year and surpassing analyst predictions.
However, despite these strong top-line figures, CoreWeave posted a net loss of $291 million for the quarter, or -$0.60 per share, significantly wider than the -$0.20 per share loss analysts had anticipated. The adjusted net loss deepened to $131 million, a considerable increase from $5 million in the same period last year. This deeper loss triggered a decline in share value, with CoreWeave’s stock falling by as much as 10.4% in extended trading sessions.
The primary culprit behind these expanded losses is the company’s aggressive, capital-intensive strategy to scale its infrastructure. CoreWeave’s capital expenditures (CapEx) hit a record $2.9 billion in Q2, an increase of over $1 billion quarter-over-quarter, as it races to deploy more data center capacity and acquire cutting-edge hardware, including the complete Blackwell GPU portfolio. Management emphasized that these massive investments are essential to meet the “unprecedented demand” for AI compute. This rapid expansion has also led to a significant increase in the company’s debt load, which reportedly ballooned to approximately $8.7 billion by 2024, with $7.5 billion set to mature by 2026. Consequently, interest expenses soared to $267 million in Q2, up sharply from $67 million a year ago, further contributing to the net loss.
The financial reality of building the backbone for the AI revolution highlights broader industry challenges. Data center operators globally are grappling with power scarcity, the high costs associated with specialized hardware and advanced cooling systems, and a talent gap for skilled professionals. CoreWeave, while demonstrating impressive revenue growth and a strong customer pipeline, faces intense competition from hyperscale cloud providers like Amazon Web Services, Google Cloud Platform, and Microsoft Azure, as well as other specialized GPU cloud providers.
Looking ahead, CoreWeave has raised its full-year 2025 revenue guidance to between $5.15 billion and $5.35 billion, reflecting continued optimism about demand. However, the company also projects full-year CapEx to be between $20 billion and $23 billion, with a significant portion expected in the fourth quarter. While analysts acknowledge CoreWeave’s strong market position and growth trajectory, the wider-than-expected losses underscore the financial tightrope companies must walk in this hyper-growth sector, balancing aggressive investment with the path to profitability.