CoreWeave reported third-quarter revenue above Wall Street expectations, supported by strong demand for its cloud services. The performance helped ease recent investor concerns about the sustainability of demand for AI infrastructure amid the company’s rising debt burden.
The company’s shares climbed more than 7% in extended trading following a sharp decline last month.
For the third quarter ended September, CoreWeave reported revenue of $3.66 billion, compared with $1.37 billion in the corresponding period last year. The figure also exceeded analysts’ average estimate of $3.55 billion, according to data compiled by LSEG.
Furthermore, the company raised its annual revenue guidance to a range of $13 billion to $13.3 billion, up from its earlier forecast of $12.4 billion to $13.2 billion.
“Customer contracts come first, and investment follows,” CEO Mike Intrator said in a statement.
“Because CoreWeave’s investments are tied to committed demand, lenders have something concrete to lend against, and customers typically help fund the buildout through prepayments.”
However, despite its strong revenue growth, CoreWeave has faced mounting investor concerns over its financial position. Its shares have fallen more than 40% over the past month, making the company a focal point of growing fears about a potential AI bubble. Investors have raised concerns about its heavy borrowing to purchase chips, land, and energy for AI data centres, which typically generate limited returns until customers lease the facilities.
The Nvidia-backed AI cloud company, valued at $27 billion, has yet to report a profit, according to data compiled by LSEG. Moreover, it had more than $50 billion in debt as of June.
Credit market indicators have also reflected growing concerns. Yields on CoreWeave’s 2030 bonds currently stand at approximately 15.2%, while its five-year credit-default swaps, which measure perceived default risk, trade at 1,135 basis points.
The selloff also triggered a broader crisis of confidence in AI stocks. Investor concerns intensified following the Democrats’ sweeping victory in the US midterm elections, as markets assessed the possibility of tighter regulation governing the country’s data-centre expansion.
Meanwhile, recent earnings reports from major hyperscalers have pointed to delays in data-centre projects and a slower pace of spending growth. CoreWeave counts Microsoft, Meta, OpenAI, and Anthropic among its major customers.
In addition, Microsoft has tightened oversight of certain data-centre projects involving neocloud companies Nebius, IREN, and Nscale as it prioritises the expansion of its own data-centre infrastructure, reported last week.
CoreWeave currently operates approximately 52 data centres worldwide, supported by advanced Nvidia chips. The company also has more than 1.7 gigawatts of active capacity globally, equivalent to the power required to supply over 1.2 million US homes.
Nevertheless, some analysts believe market concerns surrounding CoreWeave’s financing position are excessive, pointing to its execution capabilities and track record in securing funding.
Brokerage firm Truist said market sentiment had become disconnected from the improving economics of AI cloud providers. It added that higher pricing and rising customer prepayments could reduce these companies’ reliance on external capital.
Last month, Intrator also sought to address investor concerns in a memo, stating that CoreWeave’s deal backlog was large enough to more than cover its debt obligations.
