Sat May 17 09:20:00 UTC 2025: **CoreWeave Stock Swings After High Spending Forecast, $4B OpenAI Deal**
**New York, NY** – Shares of AI data center firm CoreWeave (CRWV), backed by Nvidia (NVDA), experienced significant volatility Thursday as investors reacted to its first earnings report as a public company. The stock initially surged as much as 8% before plummeting 9% and ultimately closing down approximately 2.5%.
The whipsaw action followed CoreWeave’s announcement of a capital expenditure forecast of $20 billion to $23 billion for 2025, exceeding Wall Street’s consensus estimate of $18.3 billion. This ambitious spending plan, revealed during the company’s inaugural earnings update, sparked concerns about the company’s financial health.
Adding to the complexity, CoreWeave disclosed a new $4 billion agreement with OpenAI, on top of the previously reported $11.9 billion commitment. Executives cited these deals as key drivers behind their higher-than-expected revenue projections for the coming quarter and full year, anticipating $1.06-$1.1 billion for Q2 and $4.9-$5.1 billion for the year.
However, the increased spending plans and significant debt burden led DA Davidson analyst Gil Luria to downgrade the stock to “Underperform,” citing concerns about the level of capital intensity that equity investors are likely to tolerate. Luria also highlighted CoreWeave’s ballooning interest expenses, which soared 549% to $264 million in the first quarter, surpassing estimates.
CoreWeave’s CFO, Nitin Agrawal, attributed the higher spending to surging customer demand. The company, a major holder of Nvidia GPUs, leases its data center capacity to tech giants like Microsoft (MSFT) and Meta (META) amid the AI race. Notably, 72% of CoreWeave’s $981.6 million first-quarter revenue came from Microsoft, largely driven by services for OpenAI.
Despite the optimistic revenue forecasts, CoreWeave reported an adjusted net loss of roughly $150 million for the first quarter, worse than the expected $41.7 million loss.
The stock’s performance since its March IPO has been turbulent. While it was up 66% prior to Wednesday’s earnings release, its initial IPO fell short of expectations, raising $1.5 billion instead of the hoped-for $4 billion. The conflicting signals of rapid growth in a high-demand sector versus significant debt and capital requirements are creating a divided sentiment on Wall Street.
Analysts remain split on the company’s long-term prospects. Stifel analyst Ruben Roy maintains a “Buy” rating, emphasizing CoreWeave’s “first to market positioning as a purpose-built AI infrastructure provider.” However, Macquarie analyst Paul Golding, with a “Neutral” rating, acknowledged the company’s competitiveness and growth potential in the AI space.
The combination of high capital expenditure, a massive OpenAI deal, and a looming debt burden has presented a complex picture for investors, leading to Thursday’s volatile trading session.
First Piper 