Coreweave Inc. Faces Sharp Stock Drop Amid Larger Losses
Coreweave Inc. recently experienced its most significant stock drop in over six months. This came after the company announced a loss that exceeded expectations, alongside rising capital expenditures, which has raised some eyebrows regarding potential overspending on infrastructure.
In a statement released on Thursday, Coreweave disclosed that its fourth-quarter loss broadened to 89 cents per share, while analysts were forecasting around 72 cents. On a brighter note, revenue climbed to $1.57 billion, just slightly above the anticipated $1.55 billion.
The AI data center operator didn’t stop there; it also revealed that its capital spending for 2026 is set to fall between $30 billion and $35 billion, which is considerably higher than what analysts had projected.
Coreweave belongs to a group known as Neoclouds, offering access to high-performance chips and computing resources. Demand for its services has surged, and the company has secured contracts with notable customers including OpenAI, Meta Platforms, and Microsoft.
However, the cost of expanding capacity has posed challenges. Back in November, Coreweave adjusted its annual sales forecast downward due to delays in fulfilling customer contracts. To support its growth strategy, the company has taken on additional debt.
In an interview, CEO Mike Intrater explained that Coreweave essentially helps customers purchase equipment like AI processors while borrowing the necessary funds. “Yes, we will be spending a lot of money,” he noted. “But no one is going to lend us that money unless they are in a position to sell it to Microsoft, Meta, Nvidia, Google.”
He emphasized that the company is “unapologetic” about its business model, stating, “This is the basic investment theory that we need to get people comfortable with us. That’s what we do.”
Yet, this approach might require further persuasion for investors. On Friday, shares dropped 19% in New York, marking the steepest single-day decline since mid-August. Interestingly, they had gained about 36% year-to-date prior to Thursday’s announcement.
Coreweave predicts its revenue will range from $12 billion to $13 billion this year, with sales expected to reach around $2 billion in the first quarter. However, analysts were looking at $12.1 billion in sales for 2026 and $2.24 billion for the first quarter. The company anticipates adjusted operating income to fall anywhere between breakeven and $40 million.
Since going public in March 2025, Coreweave has drawn investors eager to capitalize on the burgeoning field of artificial intelligence. Based in Livingston, New Jersey, it enjoys a close partnership with Nvidia, a leading AI chip manufacturer.
Nvidia recently invested an additional $2 billion in Coreweave, aiming to expedite the addition of over 5 gigawatts of AI computing power by 2030. Under this collaboration, Coreweave is set to be an early adopter of future Nvidia products.
The company has also raised its level of debt and is contemplating securing roughly $8.5 billion from financial institutions, including Morgan Stanley and Mitsubishi UFJ Financial Group, to assist with Meta’s cloud computing enhancements.
Over recent years, Coreweave has significantly increased its borrowing, contributing to a debt surplus in the industry that has unsettled some investors. By September 30, the company’s adjusted leverage—essentially its debt in relation to earnings—was approximately 6.9 times, with expectations to continuously consume cash for at least the next 18 months due to heavy capital expenditures, according to a report from Moody’s Ratings.
