CoreWeave shares plunge. Revenue doubles but AI costs are rising.

By Christine Ji

Shares of CoreWeave fall 9% in after-hours trading as investors consider shrinking margins and lower-than-expected revenue guidance

A rapid infrastructure buildout has put pressure on CoreWeave's margins.

Insatiable demand for artificial-intelligence hardware led CoreWeave to report its strongest quarter ever of new business deals on Thursday. But the company's earnings missed expectations and provided weak guidance.

Shares of CoreWeave (CRWV) fell 9% after hours.

CoreWeave reported $2.08 billion of revenue for the first quarter, surpassing Wall Street's expectations of $1.97 billion and more than doubling from the $982 million figure a year ago.

The neocloud company also showed momentum in future revenue visibility. "This was the strongest bookings quarter in CoreWeave's history, with revenue backlog reaching nearly $100 billion," CEO Michael Intrator said in a statement. On the earnings call, Intrator said that the company was sold out of 2026 capacity.

But while demand was strong, CoreWeave reported a loss of $1.40 per share, steeper than the FactSet consensus of 95 cents. The company posted an adjusted net loss of $589 million. CoreWeave's capital expenditures totaled $6.8 billion for the quarter, exceeding the $6.0 billion expected by analysts.

More: CoreWeave upsizes bond deal for an additional $1 billion. AI debt is in vogue.

For the current quarter, CoreWeave guided for revenue between $2.45 billion and $2.6 billion, coming in slightly lower than the $2.70 billion anticipated by Wall Street. CoreWeave reaffirmed its full-year guidance of $12 billion to $13 billion.

Also weighing down the stock was a raised capital-expenditures outlook. The company anticipates capital expenditures for the full year to come out in between $31 billion and $35 billion, increasing the low end from $30 billion previously due to higher component costs and supply-chain shortages.

Leading up to the earnings report, CoreWeave's stock had posted an 80% gain since the beginning of the year as industry-wide spending expectations reset higher. In recent weeks, CoreWeave has signed a slew of high-profile deals to provide computing to customers like Anthropic, Meta Platforms (META) and Jane Street - bringing its backlog to $99.4 billion, up 284% from a year before.

Financial success hinges on converting backlog into revenue, which requires bringing new data-center capacity online quickly and efficiently. But that has come with ramping costs, and analysts on the call scrutinized CoreWeave's margin profile. Adjusted operating margin for the quarter came out to 1%, compressing from 17% a year ago.

CoreWeave responded by saying that installing massive amounts of infrastructure will have a large impact on gross margins in the short term. The company believes margins will reinflate once growth normalizes.

Read: CoreWeave's stock pops as new Anthropic deal highlights intense scramble for AI compute

-Christine Ji

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05-07-26 1846ET