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CoreWeave shares fell 9% in after-hours trading on Tuesday, even after the artificial intelligence infrastructure provider reported quarterly results and forecasts that topped Wall Street expectations. The drop underscores market caution as the company grapples with narrowing margins and a heavy debt load despite explosive growth.

Record Revenue Driven by AI Demand and OpenAI Partnership

The company posted revenue of $1.21 billion for the quarter, surpassing the $1.08 billion consensus estimate. That’s more than triple the $395.4 million recorded in the same quarter last year, thanks in part to surging demand for Nvidia-powered computing services and an expanded partnership with OpenAI, which is both a client and an investor.

Net loss narrowed to $290.5 million from $323 million a year ago, reflecting operational scale but also significant expenses. Earnings per share came in at a loss of 21 cents, with comparisons to analyst forecasts limited due to differences in reporting.

Margins Under Pressure and Mounting Debt

While revenue soared, CoreWeave’s operating margin slipped sharply to 2% from 20% a year earlier. The decline was primarily driven by $145 million in stock-based compensation. The company’s debt now totals $11.1 billion, a figure that has raised questions among analysts about long-term financial sustainability.

Capacity constraints continue to limit growth, with demand for GPU compute power still outpacing supply. CFO Nitin Agrawal noted on the earnings call that the company is working to scale infrastructure to meet the surge in interest from enterprise and financial services clients.

Strategic Acquisitions and Growing Client Base

During the quarter, CoreWeave closed its $1.4 billion acquisition of Weights and Biases, a startup specializing in AI model monitoring software. CEO Mike Intrator said the deal would strengthen CoreWeave’s capabilities in AI model lifecycle management.

The company also announced that Goldman Sachs and Morgan Stanley, both underwriters of its March IPO, have become customers. CoreWeave’s IPO raised $1.5 billion through the sale of 37.5 million shares at $40 each.

As of Tuesday’s close, shares were trading at $148.75, giving the company a market capitalization exceeding $72 billion.

Strong Guidance Points to Continued Growth

For the third quarter, CoreWeave expects revenue between $1.26 billion and $1.30 billion, above the $1.25 billion expected by analysts. Full-year guidance was raised to $5.15–$5.35 billion, up from a previous forecast of $4.9–$5.1 billion. This outlook implies year-over-year growth of around 174%, a staggering pace for a newly public company.

The company also revealed plans for a massive data center project in New Jersey, with up to 250 megawatts of capacity set to come online in 2026. Additionally, later this year, CoreWeave will introduce spot-based GPU rentals, allowing clients to access lower-cost compute power with the trade-off that resources can be reclaimed for higher-priority workloads.

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