CoreWeave shares turn negative, fall more than 2%

CoreWeave shares turn negative, fall more than 2%

CoreWeave Inc. (NASDAQ: CRWV) shares declined more than 2% following the company’s fourth-quarter earnings report, which highlighted a wider-than-expected net loss and a significant increase in capital expenditures. The stock, which had gained 36% year-to-date prior to the report, fell 19% on March 7, marking its worst single-day decline since August 2025. The company reported a loss of $452 million, or $0.89 per share, in the December quarter, exceeding analyst estimates of $0.72 per share. Revenue rose to $1.57 billion, slightly above the $1.55 billion forecast.

CoreWeave announced 2026 capital spending of $30 billion to $35 billion, more than double its 2025 outlay of $14.9 billion, to expand AI data center capacity. The company, which serves clients like Microsoft, Meta, and OpenAI, attributed the heavy spending to surging demand for AI infrastructure. CEO Mike Intrator emphasized that debt financing is tied to pre-secured customer contracts, stating, "There's no way that anyone would lend us that money" if we weren't already in a position where we have sold that to the Microsofts and the Metas.

Despite the revenue beat, investors expressed concerns over the company's leverage ratio of 6.9x and its reliance on debt. CoreWeave's order backlog surged to $66.8 billion, up from $15.1 billion in the prior year, while its debt ballooned to $6.7 billion. Analysts at Bernstein downgraded the stock to "underperform," citing risks from overspending and uncertain profitability.

The stock's decline reflects broader market skepticism about the sustainability of AI-driven growth narratives, particularly as rivals like Nvidia also face profit-taking pressures. CoreWeave projects $12–$13 billion in 2026 revenue, with adjusted operating income near breakeven.