Contract Delays Hit CoreWeave’s Growth Outlook
Shares of CoreWeave (CRWV) fell as much as 12% on Tuesday, their steepest drop in three months, after the company cut its annual revenue forecast due to delays in fulfilling a large customer contract.
CoreWeave now expects 2025 sales between $5.05 billion and $5.15 billion, down from a prior outlook of up to $5.35 billion. The delay stems from a third-party data center developer falling behind schedule, temporarily limiting capacity for one of CoreWeave’s top clients.
While the delay will affect fourth-quarter performance, the client has agreed to adjust delivery timelines, allowing CoreWeave to maintain the total contract value. The company described the issue as logistical rather than financial, citing widespread capacity bottlenecks across the AI infrastructure sector.
Margins Tighten Amid Expansion Challenges
The Livingston, New Jersey-based company reported revenue of $1.36 billion in the third quarter, ahead of analyst expectations of $1.29 billion. However, operating income margin slipped to 4%, missing forecasts of 6.5% and falling from the year-earlier period.
CoreWeave posted a loss of $0.22 per share, narrower than Wall Street’s projected $0.57 loss — a modest improvement despite mounting cost pressures tied to data center expansion.
The company’s revenue backlog surged to $55.6 billion, nearly double the previous quarter, signaling strong forward demand. CoreWeave’s business model — renting out AI computing power through its so-called “neocloud” network — has positioned it as a critical infrastructure provider in the global AI race.
AI Boom Still Driving Long-Term Demand
CoreWeave, which went public in March, is part of the new generation of AI cloud infrastructure firms catering to hyperscalers like OpenAI, Microsoft, and Meta Platforms.
In September, the company announced a $14.2 billion deal with Meta to provide computing power for large-scale AI workloads. Microsoft accounted for 71% of CoreWeave’s revenue in the prior quarter, though the firm has been actively diversifying its customer base to reduce dependency.
The company also attempted to acquire Core Scientific, a fellow data center operator, but the deal was rejected by shareholders last month. CoreWeave quickly pivoted, securing a smaller acquisition to bolster capacity instead.
Despite temporary construction delays, CEO Michael Intrator said the company remains focused on scaling capacity responsibly, noting that the demand environment for AI infrastructure remains “unlike anything the industry has seen.”
WSA Take
CoreWeave’s dip is less about demand and more about logistics. The AI infrastructure leader continues to post strong revenue growth and a record backlog, even as supply chain and construction challenges ripple through the industry.
For investors, the takeaway is that AI infrastructure is scaling faster than it can be built — a reality that benefits long-term players but may inject volatility into quarterly results.
Read our recent coverage on U.S. stocks rallying as the Senate moves to end the shutdown.
Explore more insights on the Wall Street Access homepage.
Disclaimer:
Wall Street Access does not work with or receive compensation from any public companies mentioned. Content is for informational and educational purposes only.
