CoreWeave Posts Record Q3 Revenue Growth Amid Losses and Short Seller Concerns

• Revenue Growth: CoreWeave’s Q3 earnings hit $1.36 billion, beating expectations by 5% and doubling from prior periods.

• Contract Backlog Expansion: Deals with OpenAI and Meta boosted the backlog to $55.6 billion, up 31% quarter-over-quarter.

• Loss Reduction: Net loss narrowed to $110 million from $360 million last year, with earnings at a 22-cent per-share loss, per LSEG data.

Discover CoreWeave’s explosive Q3 revenue growth from $1.29B estimates to $1.36B, fueled by AI demand and crypto roots. Explore backlog deals and challenges—stay ahead in AI infrastructure trends today.

What Was CoreWeave’s Q3 Revenue and Key Financial Highlights?

CoreWeave’s Q3 revenue reached $1.36 billion, surpassing Wall Street’s $1.29 billion estimate from LSEG by a notable margin and marking a 134% increase from the previous year’s third quarter. This performance underscores the company’s rapid scaling in providing Nvidia GPU rentals for AI development, though it still incurred a $110 million net loss—improved from $360 million last year—with earnings at a 22-cent per-share loss. The results position CoreWeave as a key player in the AI boom, evolving from its cryptocurrency mining beginnings.

How Did CoreWeave Build Its $55.6 Billion Contract Backlog?

CoreWeave’s contract backlog surged to $55.6 billion in Q3, a 31% increase from $42.3 billion at the end of Q2, driven by major expansions with leading AI firms. A $6.5 billion extension with OpenAI, the developer of ChatGPT, and a new six-year deal with Meta valued at up to $14.2 billion formed the core of this growth. Additionally, an undisclosed agreement with a leading hyperscaler contributed, alongside customers like Google and Microsoft that rely on CoreWeave’s compute power.

The company also boosted its contracted power capacity to 2.9 gigawatts from 2.2 gigawatts, reflecting heightened demand for AI infrastructure. This backlog not only signals future revenue potential but also highlights CoreWeave’s strategic pivot from crypto mining operations, where it initially rented GPUs for blockchain applications, to supporting generative AI models that require immense computational resources.

According to internal reports, these deals have nearly doubled the backlog in recent months, with CEO Michael Intrator stating in the earnings release, “We almost doubled our revenue backlog to more than $55 billion.” This expansion demonstrates CoreWeave’s ability to secure long-term commitments in a competitive landscape, though it comes amid heavy investments in capacity and software tools.

Frequently Asked Questions

What Is CoreWeave’s Background in Cryptocurrency Mining?

CoreWeave originated as a cryptocurrency mining startup about three years ago, operating from modest beginnings in a founder’s grandfather’s garage, focusing on GPU rentals for blockchain activities. This foundation in crypto provided the technical expertise that later transitioned into AI infrastructure services, allowing the company to repurpose mining hardware for high-demand AI computations and attract major tech clients.

How Has CoreWeave’s Stock Performed Since Its IPO?

CoreWeave went public on Nasdaq in March, pricing shares at $40 each, and by the close of trading on the earnings announcement day, shares reached $105.61, delivering a 164% return that outpaced the Nasdaq’s 32% gain over the same period. However, the stock dipped in after-hours trading post-earnings, reflecting investor reactions to ongoing losses despite revenue growth, in a voice that’s clear and straightforward for quick understanding.

Key Takeaways

• Revenue Milestone: CoreWeave’s $1.36 billion Q3 figure exceeded forecasts, showcasing 134% year-over-year growth rooted in AI GPU demand from its crypto heritage.
• Backlog Strength: New deals with OpenAI and Meta propelled the $55.6 billion backlog, indicating robust future revenue streams amid expanding power capacity to 2.9 gigawatts.
• Challenges Ahead: A $110 million net loss persists, and a failed $9 billion acquisition of Core Scientific underscores risks; investors should monitor customer concentration and valuation debates.

Conclusion

CoreWeave’s Q3 revenue of $1.36 billion and expanded $55.6 billion contract backlog highlight its pivotal role in AI infrastructure, building on cryptocurrency mining origins to serve giants like OpenAI and Meta. While net losses narrowed to $110 million, criticisms from short seller Kerrisdale Capital regarding overreliance on Microsoft—accounting for 70% of revenue—and unsustainable economics at a $75 billion valuation raise caution. As the AI sector evolves, CoreWeave’s trajectory suggests continued innovation; stakeholders should track upcoming quarters for signs of profitability and diversification to capitalize on this momentum.

CoreWeave, a U.S.-based provider of Nvidia GPUs for AI tools, demonstrated exceptional growth in the third quarter, with revenue climbing to $1.36 billion—a figure that not only beat analyst expectations of $1.29 billion from LSEG but also represented a 134% jump from the prior year. This surge is emblematic of the company’s aggressive push into the AI infrastructure space, where demand for high-performance computing is skyrocketing. However, the path forward includes hurdles, as evidenced by the persistent net loss of $110 million, albeit a significant improvement from the $360 million recorded in Q3 of the previous year. Earnings per share reflected a 22-cent loss, underscoring the high costs associated with scaling operations rapidly.

At its core, CoreWeave’s business model revolves around renting out specialized hardware to enterprises developing advanced AI applications. Major clients such as Google and Microsoft depend on this compute power, which has fueled the company’s expansion. The third quarter saw particular momentum in securing long-term contracts, elevating the revenue backlog to an impressive $55.6 billion from $42.3 billion three months earlier. Contracted power capacity also rose to 2.9 gigawatts, up from 2.2 gigawatts, signaling preparations for even greater demand in the coming periods.

Key to this backlog growth were strategic agreements announced during the quarter. CoreWeave expanded its partnership with OpenAI by $6.5 billion, building on the AI pioneer’s need for scalable resources to advance models like ChatGPT. Complementing this was a fresh six-year contract with Meta, potentially worth $14.2 billion, aimed at supporting the social media giant’s AI initiatives. An additional undisclosed deal with a prominent hyperscaler further bolstered these figures, pushing the backlog higher by over 30% in just one quarter. These partnerships illustrate CoreWeave’s deepening integration into the AI ecosystem, leveraging its origins in cryptocurrency mining—where GPUs were first optimized for intensive tasks—to meet modern AI requirements.

The company’s public market entry earlier this year, via a Nasdaq listing at $40 per share, has been a resounding success in terms of stock appreciation. Shares closed at $105.61 on the earnings release day, yielding a 164% return that far exceeded the Nasdaq index’s 32% advance over the same timeframe. This performance reflects investor enthusiasm for CoreWeave’s growth narrative. Yet, the stock experienced a decline in extended trading following the report, possibly due to focus on the ongoing losses and other operational setbacks.

One notable disappointment was the collapse of a proposed $9 billion acquisition of Core Scientific, a data center infrastructure provider. Shareholders of the target company rejected the deal, depriving CoreWeave of a vital avenue for expansion despite its building momentum. This event highlights the complexities of mergers in a fast-moving industry.

Michael Intrator, CoreWeave’s co-founder, CEO, and Chairman, emphasized the quarter’s achievements in the official earnings statement. “We delivered an exceptional third quarter,” he noted, crediting the team for setting new records. Intrator highlighted the focus on infrastructure development, capacity building, customer acquisition, and innovative software solutions as drivers of the nearly doubled backlog exceeding $55 billion. His comments reinforce the company’s commitment to sustainable scaling.

Despite these positives, external scrutiny has intensified. Kerrisdale Capital, a New York-based investment firm known for short-selling positions, released a critical report last month labeling CoreWeave as “the poster child of the AI infrastructure bubble.” The analysis portrayed the company as an “undifferentiated, heavily levered GPU rental scheme,” questioning the substance behind its rapid ascent. Kerrisdale pointed to heavy dependence on Microsoft, which reportedly constitutes 70% of revenue, as a vulnerability—especially after Microsoft opted not to renew certain business and instead inked a larger pact with rival Nebius.

The report delved into CoreWeave’s history, from a crypto mining venture in humble settings just three years prior to its current status as a $75 billion “AI hyperscaler.” Kerrisdale argued this evolution lacks robust financial backing and questioned the company’s returns, claiming they fall below the cost of capital and thus erode shareholder value. They proposed a $10 per-share fair value, implying a potential 90% plunge from current levels. CoreWeave has refrained from a detailed public rebuttal, leaving the debate open as it navigates between impressive deal flow and investor skepticism.

In the broader context of financial markets, CoreWeave’s story intersects with cryptocurrency themes through its foundational use of GPUs for mining, a sector that popularized such hardware before AI took center stage. This transition has positioned the company uniquely, but it also invites comparisons to the volatility seen in crypto cycles. As AI investments pour in, CoreWeave must balance growth with profitability to solidify its standing.

Looking at operational metrics, the quarter’s results paint a picture of a firm investing heavily to capture market share. Revenue from GPU rentals has benefited from the AI hype, but expenses tied to data centers and acquisitions remain substantial. The failed Core Scientific deal, in particular, may prompt alternative strategies for geographic and capacity expansion.

Analysts tracking the sector note that while CoreWeave’s customer base is elite, diversification is crucial. The hyperscaler partnerships provide stability, but concentration risks, as flagged by Kerrisdale, could impact future quarters if key clients shift priorities. Nonetheless, the $55.6 billion backlog offers a strong buffer, equivalent to years of potential revenue at current rates.

Intrator’s leadership has been instrumental in this pivot. His vision of evolving from crypto-centric operations to AI infrastructure has attracted talent and capital, evident in the workforce expansion and technological upgrades. Quotes from the earnings call suggest confidence in ongoing innovations, such as proprietary software that optimizes GPU utilization for AI workloads.

The market’s reaction to the earnings—initial gains followed by a pullback—mirrors broader sentiments in tech stocks. Investors weighing CoreWeave’s prospects must consider the AI sector’s long-term potential against short-term financial pressures. With no immediate plans disclosed to address the acquisition setback, focus shifts to organic growth and new contract wins.

Ultimately, CoreWeave exemplifies the intersection of cryptocurrency hardware expertise and artificial intelligence demands, a niche that continues to draw attention in financial journalism. As the company reports progress, it remains a watchlist staple for those interested in tech-driven revenue streams.