CoreWeave's shares slip after it unveils AI spending plans in first results since IPO
FILE PHOTO: A screen displays the company logo for CoreWeave, Inc., Nvidia-backed cloud services provider, during the company's IPO at the Nasdaq Market, in New York City, U.S., March 28, 2025. REUTERS/Brendan McDermid/File Photo
(Reuters) -CoreWeave shares fell more than 5% in premarket trading on Thursday, after the Nvidia-backed artificial intelligence company unveiled its capital expenditure plans to meet booming demand.
The data center operator, which went public in March, forecast its second-quarter capital expenditure would be in the range of $3 billion to $3.5 billion while revenue expectations were $1.06 billion to $1.1 billion.
CoreWeave's management was optimistic about the demand for its services on the post-earnings call, but brokerage MoffettNathanson said "the cost of preparing to meet this demand may spook investors" who are paying a high price for the stock.
CoreWeave, which leases computing capacity to technology companies and hyperscalers building AI models such as one of its prominent customers Microsoft, reported a more than five-fold increase in revenue to $981.6 million for the first three months of the year.
"We have also added new enterprise customers and a new hyperscaler and signed expansion agreements with several large customers, including a recent $4 billion expansion with a large AI enterprise," CoreWeave's CEO Michael Intrator said.
Its annual and second-quarter capital expenditure forecasts indicate AI spending could continue at a similar pace even as investor scrutiny sharpened after the launch of DeepSeek's low-cost AI models.
Big Tech firm Meta raised its annual capital expenditure forecast, while Alphabet reaffirmed it and a Microsoft executive also re-emphasized the company's AI spending plans in a LinkedIn post in April.
As of last close, CoreWeave's stock had surged 69% from the offer price in its March IPO. At least five brokerages have raised their price targets on the stock to between $50 and $70 following the results.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Krishna Chandra Eluri)
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