CoreWeave's stock drops as losses swell and interest expenses climb

By Christine Ji

While AI demand remains high, CoreWeave's widening net loss in the fourth quarter is giving investors pause

CoreWeave's revenue backlog quadrupled from the beginning of 2025.

CoreWeave shares faced pressure in after-hours trading on Thursday after the company's fourth-quarter earnings report showed healthy demand and revenue growth but a widening net loss.

CoreWeave's stock (CRWV) fell 8.8% in after-hours trading. The company's fourth-quarter revenue reached $1.57 billion, growing 110% year over year and exceeding the $1.55 billion FactSet consensus. But it also posted a net loss of $452 million, far steeper than the $342 million anticipated by analysts.

"2025 was a defining year for CoreWeave as we became the fastest cloud in history to reach $5 billion in annual revenue," chair and CEO Michael Intrator said in a statement.

Demand for CoreWeave's products is strong. The company's backlog grew to $66.8 billion in the fourth quarter - quadrupling from the beginning of 2025 - and CoreWeave is building aggressively to turn the backlog into revenue. The company added 260 megawatts of active power capacity in the fourth quarter alone, bringing its total to over 850 megawatts. More important for future scaling, CoreWeave has contracted for 3.1 gigawatts of total power, securing access to address a critical artificial-intelligence bottleneck. The company has resolved the data-center delays that impeded revenue growth in the the third quarter, Intrator said on the earnings call.

But the cost of building the massive data centers required to house Nvidia's (NVDA) high-end chips continues to weigh on the bottom line, especially as CoreWeave takes on debt to fund its expansion. While CoreWeave is growing revenues at a rapid clip, the company's interest expenses are increasing at a similar pace. Net interest expenses for the fourth quarter were $388 million, a 160% year-over-year increase.

Adjusted operating income was $88 million for the fourth quarter, "lower than expected as a result of deploying infrastructure ahead of our expectations," CFO Nitin Agrawal said on the call. The adjusted operating margin was 6%.

One part of CoreWeave's solution to growing interest expenses appears to be expansion into higher-margin revenue streams. On the call, Intrator emphasized new avenues of monetization for CoreWeave such as CPU, storage, software and development tools. "The opportunity to add additional value to these customers as their AI workloads mature is substantial and represents meaningful upside over time," Intrator said, adding that the revenue would be "higher margin" and is not currently factored into guidance estimates at this time.

Capital expenditures in 2026 are anticipated to be $30 billion to $35 billion, more than twice the levels in 2025 and higher than analysts' expectations of $26.9 billion. Management emphasized that the capex spending is tied to already signed customer contracts.

CoreWeave guided for current-quarter revenues between $1.9 billion and $2 billion, falling short of analysts' expectations of $2.3 billion. CoreWeave anticipates exiting 2026 with $17 billion to $19 billion of annual recurring revenue, and reaching $30 billion of ARR by 2027.

Analysts on the call were curious about how capex levels could drive revenue growth and improve margins going forward. While CoreWeave will incur upfront costs to bring capacity online, Agrawal signaled that the first quarter of 2026 will represent the "trough" for margins. He also highlighted high-margin "accretive" services like AI storage - which now boasts an 80% attach rate among large customers - as a force that could eventually drive long-term margins to the 25% to 30% range.

See more: CoreWeave's stock drops. Why a $4 billion Blue Owl funding snag has investors on edge.

-Christine Ji

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02-26-26 2030ET