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CoreWeave (CRWV), a cloud-based GPU-as-a-Service provider, failed to impress investors when it announced its first quarterly earnings as a public company on Wednesday. Yet, according to one Wall Street analyst, the fallout might be limited, given CoreWeave's IPO-related equity dislocations.
For the benefit of those who might not be aware, CoreWeave is a cloud company that specializes in handling GPU-intensive AI workloads. Over the past few years, the company has carved out for itself a winning niche by leveraging a unique partnership with NVIDIA, one that allows it to be among the first to offer access to NVIDIA's latest-gen GPUs at scale, all packaged within an infrastructure that has been optimized to handle AI workloads, replete with "sub-microsecond" network latency and an effective GPU lifecycle management system. Basically, CoreWeave rents out NVIDIA's latest GPUs on the cloud, packaged with various bells and whistles designed to attract AI startups.
$CRWV TTN Summary Earnings Call: Customer demand is accelerating despite the macro uncertainty; Inference demand also accelerated, as enterprises shift from training to revenue-generating inference workloads (CoreWeave)
- Q2 revenue guidance of $1.06–1.10 B, with adjusted… pic.twitter.com/zmdj0iDD1P
— TradeTheNews.com (@Trade_The_News) May 15, 2025
On Wednesday, CoreWeave announced its earnings for the first quarter of 2025, showing $981.632 million in revenue, which corresponds to a 14 percent beat vs. the consensus estimate.
The company has also added Google as its latest hyperscaler customer. Moreover, its order backlog is currently worth $25.9 billion, and includes orders worth $11.2 billion from OpenAI alone.
However, CoreWeave's guidance serially disappointed, with the company now projecting Q2 CapEx of between $3 billion and $3.5 billion on projected revenue of between $1.06 billion and $1.1 billion.
What's more, the company failed to meet EPS expectations, largely due to $177 million in IPO-related stock-based compensation.
For FY 2025, CoreWeave now expects $4.9 billion to $5.1 billion in revenue, operating income of between $800 million and $830 million, and CapEx of between $20 billion and $23 billion.
Critically, CoreWeave's CapEx remains "lumpy" (not evenly distributed) and continues to be financed by self-amortizing debt and the newly available $1.5 billion revolver financing facility.
DA Davidson DOWNGRADES $CRWV to Underperform from Neutral, Says Business Not Worth Scaling, Maintains PT at $36
Analyst comments: "We are downgrading to Underperform from Neutral and maintain a $36 price target based on 3x CY26 revenue. Investors regretted scaling WeWork, and… https://t.co/TTpwEEIgj7
— Wall St Engine (@wallstengine) May 15, 2025
Accordingly, DA Davidson analyst Gil Luria has now downgraded CoreWeave to an 'Underperform' rating, and pegged a stock price target of $36. For reference, the stock is currently trading at the $68 price level in today's pre-market trading session.
While asserting CoreWeave's similarities with WeWork, Luria concedes that the downside for the high-flying stock remains limited for now:
"We realize shares may have limited short-term downside given the very small float and very high cost to borrow, but that may change upon the expiration of the lockup and likely need for secondaries."
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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