Why CoreWeave Stock Was Tumbling Today | The Motley Fool

<p>Shares of CoreWeave (<a href="/quote/nasdaq/crwv/">CRWV</a> 18.60%) were taking a dive today after the AI-focused neocloud company posted disappointing results in its fourth-quarter earnings report. </p>
<p><a href="https://www.fool.com/investing/how-to-invest/stocks/how-to-invest-in-coreweave-stock/">CoreWeave</a>, a fast-growing company providing an AI cloud, posted a wider-than-expected loss, a disappointing first-quarter revenue outlook, and a large capex forecast.</p>
<p>As of 11:50 a.m., the stock was down 19.8% on the news.</p>
<h2>CoreWeave's growth isn't enough</h2>
<p>CoreWeave continued to deliver strong growth with revenue up 110% to $1.57 billion, which edged out estimates at $1.53 billion.</p>
<p>However, investors have been concerned about widening losses, and the report only contributed to those worries as the business flipped to an $89 million operating loss from a profit of $113 million in the quarter a year ago.</p>
<p>CoreWeave is also burdened by heavy interest expense due to the debt it relies on to fund its data center buildouts. It reported $388 million interest expense in the quarter, which led to a generally accepted accounting principles (<a href="https://www.fool.com/terms/g/generally-accepted-accounting-principles/">GAAP</a>) net loss of $452 million or $0.89 per share, which was worse than estimates at a loss of $0.68.</p>
<p>The company said its revenue backlog grew to $66.8 billion, showing surging demand for its AI computing capacity, and CEO Michael Intrator added, "Demand continues to intensify as a broader set of customers adopt CoreWeave Cloud to run a diverse and growing set of workloads."</p>
<h2>
<a href="/quote/nasdaq/crwv/">NASDAQ: CRWV</a>
</h2>
<h3>Key Data Points</h3>
<h2>What's next for CoreWeave</h2>
<p>Looking ahead to 2026, CoreWeave disappointed with its first-quarter guidance, calling for revenue of $1.9 billion-$2 billion, about double the year before, which was well short of the consensus at $2.24 billion.</p>
<p>For the full year, CoreWeave called for revenue of $12 billion-$13 billion, which compared to the consensus at $12.03 billion.</p>
<p>The company also said it expected capital expenditures this year of at least $30 billion, and forecast a revenue run rate of more than $30 billion by the end of 2027.</p>
<p>Overall, the report showed CoreWeave continuing to grow fast, though not quite fast enough to please investors, while its widening losses and aggressive spending are a growing concern, especially given the stock's high valuation and unproven business model.</p>