CoreWeave Stock Rises as Third-Quarter Revenue Beats Estimates, Company Raises Full-Year Outlook

CoreWeave (CRWV) stock jumped 25% on Wednesday after the neocloud infrastructure provider reported better-than-expected quarterly revenue and raised its revenue outlook, fueled by growing customer demand for AI computing capacity.

The company highlighted that $9 billion in prepayments and customer deposits are expected over the next three months and said it does not plan to take on more expensive debt until 2027, easing concerns about how it would finance its expansion.

“The demand for compute is growing faster than the capacity to deliver that infrastructure and that is reflected in the margin expansion we are seeing on each additional contract,” Michael Intrator, co-founder and CEO of CoreWeave, said during the company’s earnings conference call Tuesday after the bell.

The company reported third-quarter revenue of $3.66 billion, compared to the consensus estimate of $3.56 billion, according to Bloomberg data. CoreWeave’s loss per share of $1.27 was less than the $1.46 Wall Street expected. The company also raised its full-year revenue forecast to $13 billion to $13.3 billion, up from a previous target of $12 billion to $13 billion.

CoreWeave stock has been battered in recent weeks, falling more than 40% in the past month amid growing concerns about AI funding. A chart that went viral in October showed CoreWeave’s rising bond yields, highlighting concerns about the company’s heavily leveraged balance sheet and its ability to expand its business quickly enough to cover rising interest expenses.

Amid the sell-off, Nvidia (NVDA) CEO Jensen Huang attempted to allay concerns about the company’s debt-heavy balance sheet by saying he was “optimistic” that its “cost of capital was coming down.”

Ines Ferre is a senior economics reporter for Yahoo Finance.