CoreWeave Stock Drops 2.9% Despite Revenue Growth, High Costs

CoreWeave's stock price experienced a decline of approximately 2.9% in pre-market trading on Thursday, continuing the downward trend from Wednesday when it plummeted by over 20%. This drop comes despite the company's second-quarter financial report showing strong revenue growth. However, the report also revealed that backlog orders and capital expenditures did not meet expectations.

The company's latest financial report for the second quarter of 2025 showed revenue of 12.1 billion dollars, but a net loss of 2.9 billion dollars. The operating profit margin for the quarter was a mere 2%, a significant drop from the 20% recorded in the same period last year. This decline in profitability is largely attributed to a near fourfold increase in operating expenses, which reached 11.9 billion dollars, leading to a net loss of 2.9 billion dollars, far exceeding analysts' expectations of 1.9 billion dollars.

Despite the company's aggressive expansion efforts, the substantial increase in operating costs has weighed heavily on its financial performance. While CoreWeave has raised its full-year revenue forecast, the market's reaction to the earnings report has been negative, reflecting investor concerns about the company's profitability and the sustainability of its growth.

The company's financial report for the first half of 2025 showed a revenue of 21.94 billion dollars, a 275.68% increase from the same period last year. However, the operating loss for the first half of the year was 826 million dollars, compared to an operating profit of 94.57 million dollars in the same period last year. The net loss for the first half of the year was 6.05 billion dollars, compared to a net loss of 4.52 billion dollars in the same period last year.

CoreWeave's aggressive expansion strategy, including the acquisition of Weights & Biases and the development of a new data center in New Jersey, has been a key driver of its growth. However, the company's financial performance has been impacted by the high costs associated with these initiatives. The company's cash and cash equivalents as of June 30, 2025, were 11.53 billion dollars, down from 13.61 billion dollars in the same period last year. The company's total assets were 39.46 billion dollars, with total liabilities of 224 billion dollars and shareholders' equity of 26.58 billion dollars.