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CoreWeave's Spending Surge Sparks Investor Jitters
27 Feb
Summary
- CoreWeave reported a larger loss than anticipated, raising concerns.
- The AI data center operator announced a significant boost in capital expenditures.
- The company's shares saw a notable drop in late trading following the announcement.
CoreWeave Inc. saw its shares drop as much as 13% in late trading on February 27, 2026, following its fourth-quarter earnings report. The company announced a wider-than-expected loss of 89 cents per share, surpassing the average analyst estimate of 72 cents. Revenue for the quarter reached $1.57 billion, slightly above the predicted $1.55 billion.
Further unsettling investors, CoreWeave projected capital expenditures for 2026 to be between $30 billion and $35 billion, a figure higher than anticipated. This expansion drive comes as the AI data center provider, known as a 'neocloud,' rents out powerful chips and computing resources to major clients including OpenAI, Meta Platforms, and Microsoft Corp.
The company, based in Livingston, New Jersey, has attracted significant investment, partly due to its close partnership with Nvidia Corp., which recently invested an additional $2 billion. CoreWeave is also seeking to raise approximately $8.5 billion from banks to finance its expansion, particularly for Meta's computing capacity.
However, CoreWeave's rapid growth has been accompanied by increased debt. A Moody's Ratings report indicated an adjusted leverage of about 6.9 times as of September 30, 2025, and predicted cash burn for at least the next 18 months amid heavy spending.
