CoreWeave Stock Climbs After Q2 Revenue Soars, But Losses and Lock-Up Risk Loom
Nvidia-backed AI infrastructure firm posts 207% revenue growth, raises guidance, but faces widening losses and upcoming share unlock.
August 15 EST: CoreWeave Inc. closed Friday trading at $100.32, up just 0.81 points on the day, as Wall Street digested a second quarter earnings release that combined eye-popping revenue growth with a deepening bottom-line loss. The mixed report has left investors split over whether the Nvidia-backed AI infrastructure provider is a high-risk bargain or a stock to avoid until its finances stabilize.
Massive Growth, Bigger Losses
According to Investopedia, CoreWeave’s Q2 revenue surged to $1.21 billion, a 207% year-over-year jump driven by voracious demand for its GPU-powered cloud infrastructure. The company also lifted its full-year guidance to between $5.15 and $5.35 billion, up from its previous $4.9 to $5.1 billion outlook.
But those numbers came with a cost. Net loss per share came in at $0.60, missing consensus forecasts for a $0.45 loss. Operating expenses ballooned 276%, a consequence of rapid expansion and capital spending needed to service large-scale AI projects.
Management also disclosed a $30.1 billion backlog as of June 30, underscoring the size of contracted future work a figure that many analysts view as the company’s main long-term safety net.
Stock Under Pressure Despite Beat
The stock sold off more than 10% immediately after the earnings release, with traders zeroing in on the widening losses. Adding to the downward momentum is a looming IPO lock-up expiration that could free up 83% of Class A shares for sale, potentially flooding the market with supply. Investors.com noted that such events often trigger bouts of volatility and short-term price weakness.
Friday’s session reflected that tension. CRWV opened at $95.87, swung between a low of $93.29 and a high of $101.69, and saw heavy intraday volume of over 15.9 million shares.
Analysts See a High-Risk Balancing Act
Market watchers are far from unanimous. On Seeking Alpha, the contributor known as Pragmatic Investor upgraded CRWV to a Hold, arguing the sharp post-earnings drop creates a potential tactical trade for those comfortable with risk. Another analyst, writing under the moniker Tech Contrarians, described CoreWeave as stuck in a “catch-22” needing to spend aggressively to capture growth while simultaneously alarming investors with its mounting losses.
Price targets reflect that divide Quiver Quantitative reports estimates ranging from about $91 on the low end to $160 on the high end. StockAnalysis puts the average 12-month target at $107, suggesting roughly 9% upside from current levels.
The Risk/Reward Split
The decision now facing investors is whether to treat CoreWeave as a volatile trade, a long-term AI growth story, or a near-term exit candidate.
- Stay, with caution:– Believers in the AI infrastructure boom may see the backlog and guidance raise as evidence of durable demand.
- Exit or trim holdings:- Conservative portfolios may shy away given the deepening red ink and potential for dilution post-lock-up.
- Tactical trade:– High-risk traders might use the earnings dip and share unlock as volatility plays.
- Patient hold:– Long-term bulls may be willing to absorb near-term turbulence in hopes of eventual profitability.
What Comes Next
The stock’s immediate direction could hinge on how the market absorbs the lock-up expiration. If selling pressure spikes, opportunistic buyers could see another entry point. But if losses continue to widen in coming quarters, even a record backlog may not prevent a reassessment of CoreWeave’s valuation.
For now, CRWV sits at a crossroads a company with some of the fastest revenue growth in the AI sector, yet one whose spending burn is just as aggressive. Investors will need to decide if that’s visionary positioning for the next wave of AI infrastructure or a gamble best left for traders.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
