Nvidia-backed (NVDA) AI data center company CoreWeave (CRWV) stock jumped as much as 11% in after-hours trading Wednesday as the company reported first quarter revenue that topped analyst estimates.
CoreWeave reported revenue of $981.6 million for the three months ended March 31 — its first quarterly report since its IPO earlier in the year — ahead of the $862.3 million expected by Wall Street analysts, according to Bloomberg estimates.
NasdaqGS - Delayed Quote USD
Its adjusted loss per share of $1.49 was steeper than the $0.16 loss expected, per Bloomberg data.
CoreWeave is one of the largest holders of Nvidia’s graphics processing units and rents its data center capacity to Big Tech firms such as Microsoft (MSFT) and Meta (META) as they scramble to secure coveted Nvidia chips to power their artificial intelligence ambitions.
"Demand for our platform is robust and accelerating as AI leaders seek the highly performant AI cloud infrastructure required for the most advanced applications," Michael Intrator, CoreWeave's co-founder and CEO, said in the release.
The company raised $1.5 billion in its IPO in March — much lower than the $4 billion it had initially hoped to raise — with the stock whipsawing as Wall Street and investors weighed its risky financials against bullish outlooks for AI demand. Ahead of Wednesday's earnings release, CoreWeave stock was up 66% since the company's market debut.
Seven analysts tracked by Bloomberg hold a Buy rating on the stock, while nine hold Neutral ratings. Hedgeye Risk Management holds a short position on the stock.
Ahead of its earnings call, DA Davidson analyst Gil Luria said investors would be watching CoreWeave’s commentary about what he called its “risky” capital structure, high customer concentration, and AI demand.
CoreWeave has a significant amount of debt: roughly $12 billion worth of debt commitments with high interest rates of 10% to 14%, according to Luria, who holds a Neutral rating on the stock. CoreWeave uses its debt, borrowed against its store of Nvidia GPUs as collateral, to buy more Nvidia chips.
“ The risk is this is a company that is borrowing at extraordinarily high interest rates in order to buy a product that depreciates very rapidly in terms of its economic value,” Luria told Yahoo Finance in an interview Wednesday.
Some 77% of CoreWeave's 2024 revenue came from just two customers, according to regulatory filings, with 62% coming from Microsoft (MSFT). And despite revenue hitting roughly $2 billion that year, the company still lost nearly $1 billion, according to a March filing with the Securities and Exchange Commission.
English (US) ·