CoreWeave stock slips after Q2 results

CoreWeave (CRWV) reported a wider second quarter loss than anticipated. Revenue, however, topped Wall Street estimates, $1.21 billion versus the expected $1.08 billion. Shares fell in the immediate aftermath of the report.

Market Domination Overtime Host Allie Canal and Robinhood chief investment officer Stephanie Guild discuss the results.

To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime.

Video Transcript

00:00 Speaker A

Core weave earnings are just hitting the wire and shares are trading lower. We are currently down around 7%. We're seeing shares actually extend some of the losses following these results here. What we're seeing is that a wider loss than was expected here. Second quarter loss per share of 60 cents. The estimate was 46 cents. Revenue did beat expectations coming in at 1.21 billion. The estimate was for just shy of 1.1 billion. We also saw operating income fall significantly short of estimates 19.2 million compared to the expected 43.8 million. Now, it's interesting because heading into this report, we did see shares close higher up around 6% on the back of an upgrade from JP Morgan. But this is a company that as we've been saying is not profitable yet. It's not expected to turn a profit until late 2026. And given this intense run up that we've seen since its IPO debut, it has been a highly contested stock. It's often sold short, according to S3 partners, more than a third of the company's shares are sold short. And remember that a core care for this company is that core weave has a very high concentration with its customer base. Only a few names that drive the bulk of that revenue, one of those names being Microsoft. And that's fueled a lot of the gains that we've seen over the past few weeks after Microsoft said it plans to ramp up its investments in AI infrastructure. So there's been a lot of momentum for this stock, especially over the past few months. But we're seeing shares down 7% today stuff. So your reaction to this report.

03:19 Speaker B

I mean, I've said this before, but like expectations are everything. And the stock it's giving back everything that it gained today. The stock is up over 250% since it IPOed. And you know, you do look at it like their revenue beat by quite a wide margin, but their earnings per share did not. And that tells you how much they're spending. And so the question comes back into the fold, which is are you are you going to get the return out of what you're spending? And it looks like they're expanding their deal with OpenAI. I know we didn't get guidance yet, but I do think that's that will be important.

04:24 Speaker A

Yeah, and to that point there was this concern that maybe investors were getting a little too over their skis when it came to the valuation and pouring a lot of that money into this name. But we have heard from analysts that this is a company that's really sitting at the center of the AI trade. A lot of secular tailwinds that we could continue to see, especially on the heels of that aggressive AI spending. But we did see a slew of analysts cut their price targets following that news that core weave would acquire data center operator core scientific in that all stock transaction. There were concerns that that was going to dilute a lot of that, a lot of the shares that were available on the market. So I'm curious to hear about what they say on the earnings call about that deal and how that may be impacts guidance.

05:46 Speaker B

Yeah, I mean it's about the spending, can you get the reward for the risk that you're taking? Right? They're expanding on data centers, every tech company out there is expanding in their data centers. Um and you just have to be like, you have to hear what their plan is in terms of making that money back. And then I know they also issued debt recently too. So they're they're definitely all in.

06:38 Speaker A

Right. But I mean JP Morgan right before these results raised its price target on shares and did say the company's ongoing AI ramp is intact. So we'll continue to monitor that and see what they say on the call. Again, the shares are down around 8%. Related Videos

04:40

Presight CEO: AI Era is Here to Stay

Bloomberg • 39 minutes ago 01:03

Can Tencent Shares Recover Back to All-Time Highs?

Bloomberg • 3 hours ago 08:12

Evolution Mining CEO on Record FY Earnings

Bloomberg • 4 hours ago 01:13

Cisco and Brinker earnings, Fed commentary: What to Watch

Yahoo Finance Video • 9 hours ago

View Comments