CRWV: CoreWeave Stock Plunges 20% Despite Triple Revenue Growth. It’s Still Losing Money.

Investors didn’t buy the “but our business is blooming fast” narrative as they rushed to sell the shares, which had rallied 30% on the month.

📉 Blockbuster Growth? Selling!

• CoreWeave stock CRWV plunged 21% Wednesday, erasing much of this month’s 45% rally, as investors focused on the AI cloud vendor’s losses rather than its booming top line.
• The selloff came even after the company reported second-quarter revenue of $1.2 billion, more than triple the $395 million posted a year earlier and ahead of analyst forecasts for $1.1 billion.
• The company’s IPO in March was priced at $40 — below the expected range — giving the shares a relatively stellar performance of 200% IPO-to-date pop.

💸 Losses Narrow

• CoreWeave booked a net loss of $290.5 million for the past quarter, narrowing slightly from last year’s $323 million loss but still deep enough to cause some panic among investors who were looking for profitability.
• Adjusted earnings per share came in at a $0.60 loss, badly missing Wall Street’s forecast for a $0.23 loss, as the company ramped spending to expand AI infrastructure capacity. Our growth continues to be capacity constrained with demand outstripping supply,” CFO Nitin Agrawal said in the earnings call.
• Founded in 2017, CoreWeave specializes in providing GPUs in the cloud, a crucial backbone for AI training and inference workloads.

👀 Outlook Still Strong

• Management guided for third-quarter revenue of $1.26 billion–$1.3 billion, topping the $1.25 billion consensus, implying 174% annual growth. The company also lifted full-year expectations to between $5.15 billion and $5.35 billion.
• CEO Michael Intrator said the company is “scaling rapidly to meet unprecedented AI demand,” highlighting a trend we’ve seen just about anywhere else where AI is involved.
• Despite rosy growth forecasts, investors appear unwilling to keep bidding up the stock until CoreWeave proves it can turn breakneck growth into sustainable profitability. Or maybe that’s just an opportunity hiding behind a red-faced pullback? As always, DYOR.