CoreWeave CEO defends capex plans, says company is meeting 'demand signals' from major companies

CNBC

15-05-2025

CoreWeave shares jumped more than 5% Thursday as the renter of artificial intelligence servers posted strong revenues and CEO Michael Intrator reinforced the company's plans to spend on growth.
In its first earnings report since its market debut in March, CoreWeave said it expects capex of $20 billion to $23 billion for the year, topping a $4.61 billion estimate for the year from analysts surveyed by LSEG.
The range included the impact of a recent OpenAI deal and other factors.
Intrator further explained the heightened capital expenditures during an interview with CNBC's "Squawk on the Street" on Thursday, saying that the company is meeting "demand signals" from critical clients asking for infrastructure quicker.
"The increase in the capex budget is driven by success within the company," he said.
Shares of CoreWeave whipsawed post-earnings. The stock was last up about 5% after falling more than 5% earlier in the session. Some investors raised issues over the company's debt and sustainability of demand for the Nvidia-backed company, which depends on businesses renting out its AI servers powered by AI chips.
Intrator told CNBC that financing remains strong and the company continues to be able to repay lenders within the term of the contracts.
"They look at the contracts, they understand the contracts, they understand our business, and they continue to lend us money so that we can scale and deliver," he said.
CoreWeave has accrued a growing list of major technology clients, including Microsoft and Nvidia, and said it recently inked a deal with another hyperscaler. OpenAI committed to a five-year deal totaling nearly $12 billion in March and signed an additional $4-billion deal at the end of the quarter. Remaining performance obligations came in at $14.7 billion, down from $15.1 billion at the end of 2024.
But some on Wall Street raised concerns over the company's debt and the sustainability of demand.
DA Davidson analyst Gil Luria downgraded shares to underperform from a neutral rating, citing concerns over the company's 12.5% interest-to-acquire assets offering a 5% return. Luria said the business is "not worth scaling" because it is meeting short-term demand spurred by "overflow capacity."
"The notion that this destruction of capital is a matter of scale does not hold up for a company at a $4bn revenue run rate already operating 33 data centers," he said in a note.
CoreWeave appeared to signal ongoing growth to support its higher costs, projecting $4.9 billion to $5.1 billion in revenues this year, representing 363% growth rate. Second-quarter revenues are forecast to range between $1.06 billion to $1.1 billion, versus an LSEG estimate of $986.7 million.
Revenue backlog, including remaining performance obligations and other amounts recognized as revenue, rose 63% to $25.9 billion during the period.
The New Jersey-based company surpassed revenue estimates for the period, posting 420% revenue growth. Revenues reached $981.6 million and topped an LSEG estimate of $853 million.
CoreWeave reported a net loss of $314.6 million, which widened from $129.2 million a year earlier. That was partly tied to $177 million in stock-based compensation costs for awards in its initial public offering.