CoreWeave (CRWV) shares tumbled 16% Wednesday after the AI data center operator issued a disappointing forecast for its third-quarter operating income. The company said Tuesday that it expects Q3 operating income to fall between $160 million and $190 million, below the $192 million consensus tracked by Bloomberg. At the same time, CoreWeave projected interest expenses of $350–$390 million for the quarter, intensifying concerns over its ability to cover debt with current profits.
DA Davidson analyst Gil Luria told Yahoo Finance that the guidance underscores a major challenge for CoreWeave: “Their interest expense is higher than their operating income, which means they aren’t generating enough profit to pay their debt holders.” In Q2, the company reported $200 million in operating income—already below its $267 million interest expense—suggesting the problem may be worsening.
The company also posted earnings that missed expectations. CoreWeave reported a Q2 loss of $0.27 per share versus the anticipated $0.19 loss, while revenue of $1.21 billion beat the $1.08 billion forecast. CEO Michael Intrator emphasized during the post-earnings call that demand for CoreWeave’s AI cloud services remains “unprecedented.”
CoreWeave rents its AI-focused data center capacity to major tech firms such as Microsoft (MSFT), Meta (META), and Google (GOOG), and is one of the largest holders of Nvidia (NVDA) AI chips. Its stock performance is closely watched as a barometer of AI demand. While many Wall Street analysts remain bullish, citing strong long-term growth prospects, critics warn that heavy debt and high interest costs pose significant risks, particularly if customers build their own AI infrastructure and reduce reliance on CoreWeave.
Analyst sentiment remains mixed but generally optimistic. Deutsche Bank’s Brad Zelnick raised his price target to $125 from $50 but kept a Hold rating, noting the Wednesday drop was “likely more related to anticipation into the lock-up expiration later this week than any new fundamental concerns.” Bank of America analyst Brad Sills kept a Buy rating but lowered his target to $168 from $185, citing uncertainty around the company’s $9 billion acquisition of Core Scientific, which could face regulatory scrutiny.
CoreWeave went public in March, and its quarterly report marks only its second as a publicly traded company. The stock’s debut has been volatile, with shares slipping in May after the company raised its projected capital expenditures for 2025. Despite this, CoreWeave is up nearly 222% since its IPO, far outpacing the Nasdaq Composite’s 22% gain and the S&P 500’s roughly 14% increase, reflecting renewed investor enthusiasm for AI infrastructure stocks after a challenging first half of the year.
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