CoreWeave's shares slip after it unveils AI spending plans in first results since IPO
Technology
CoreWeave's shares slip after it unveils AI spending plans in first results since IPO
(Reuters) - CoreWeave (CRWV.O), shares fell more than 5% in premarket trading on Thursday, after the Nvidia-backed (NVDA.O), artificial intelligence company unveiled its capital expenditure plans to meet booming demand.
The data center operator, which went public in March, forecast its second-quarter capital expenditure would be in the range of $3 billion to $3.5 billion while revenue expectations were $1.06 billion to $1.1 billion.
CoreWeave's management was optimistic about the demand for its services on the post-earnings call, but brokerage MoffettNathanson said "the cost of preparing to meet this demand may spook investors" who are paying a high price for the stock.
CoreWeave's rocky stock performance since March market debut
CoreWeave, which leases computing capacity to technology companies and hyperscalers building AI models such as one of its prominent customers Microsoft (MSFT.O), reported a more than five-fold increase in revenue to $981.6 million for the first three months of the year.
"We have also added new enterprise customers and a new hyperscaler and signed expansion agreements with several large customers, including a recent $4 billion expansion with a large AI enterprise," CoreWeave's CEO Michael Intrator said.
Its annual and second-quarter capital expenditure forecasts indicate AI spending could continue at a similar pace even as investor scrutiny sharpened after the launch of DeepSeek's low-cost AI models.
Big Tech firm Meta (META.O), raised its annual capital expenditure forecast. At the same time, Alphabet (GOOGL.O), reaffirmed it and a Microsoft executive also re-emphasized the company's AI spending plans in a LinkedIn post in April.
As of last close, CoreWeave's stock had surged 69% from the offer price in its March IPO. At least five brokerages have raised their price targets on the stock to between $50 and $70 following the results.
