AI cloud provider CoreWeave smashed quarterly revenue estimates on Tuesday, fueled by skyrocketing demand for its Nvidia-powered computing services. However, surging expansion costs led to a wider-than-expected net loss of $290.5 million, sending shares tumbling 10% in after-hours trading.*
The company reported Q2 revenue of $1.21 billion, beating expectations of $1.08 billion, while its contract backlog ballooned to $30.1 billion—up from $25.9 billion in March. But operating expenses quadrupled year-over-year to $1.19 billion as CoreWeave races to build infrastructure for AI clients.
“Demand is humming, but investors are wary of the cost to sustain this growth,” said Michael Ashley Schulman of Running Point Capital Advisors.
CEO Michael Intrator highlighted energy supply as the biggest bottleneck, citing the need for massive power capacity to run next-gen AI workloads. The firm’s pending $9 billion acquisition of crypto miner Core Scientific aims to secure 1.3 gigawatts of contracted electricity—though the deal faces opposition from Core Scientific’s largest shareholder.
Analysts also flagged reliance on a handful of major clients, including OpenAI, as a potential vulnerability. “The $30B backlog shows incredible demand, but mega-customer dependence is a double-edged sword,” said eMarketer’s Jeremy Goldman.
CoreWeave noted particularly strong uptake for AI inference services, especially for complex “chain-of-thought” reasoning models that require heavy computing power. “These models deliver far smarter outputs but demand exponentially more processing,” Intrator told Reuters.
The company raised its 2024 revenue forecast to $5.15–$5.35 billion, up from prior guidance of $4.9–$5.1 billion, as it expands its 33-data-center footprint across the U.S. and Europe.
Shares of CoreWeave have more than doubled year-to-date but pared gains after the earnings release.
With AI workloads straining global data center capacity, CoreWeave’s breakneck expansion underscores the high-cost race to dominate cloud infrastructure—and the risks of betting big on a few elite AI players.