CoreWeave shares jumped 18% in premarket trading after second-quarter revenue more than doubled to $2.6 billion and the company raised its full-year outlook. Its contracted backlog reached $104 billion, and Rosenblatt reiterated a Buy rating with a $250 price target, citing a margin beat. CoreWeave still posted an operating loss and carries a significant debt load.
CoreWeave's stock jumped 18% in premarket trading on Wednesday after the AI infrastructure provider said second-quarter revenue more than doubled to $2.6 billion, up from $1.2 billion a year earlier. The company also raised its full-year revenue guidance alongside the results.
Revenue and margins beat expectations
Rosenblatt reiterated a Buy rating and a $250 price target on CoreWeave. The firm pointed to revenue growth of 112% year-over-year that exceeded the guidance midpoint by 2%. Adjusted operating income reached $128 million, up from $21 million in the prior quarter and above the guidance range of $30 million to $90 million.
According to Citi analysts: "Overall, this was one of the cleaner quarters we've seen from Coreweave since the IPO", and they said shares should move meaningfully higher on growing investor confidence in execution and profitability. Meta, meanwhile, committed an additional $21 billion to CoreWeave during the quarter.
Backlog swells to $104 billion
CoreWeave ended the quarter with a $104 billion contracted backlog, not including $25 billion in new customer commitments for the third quarter. Rosenblatt noted the backlog rose 46% year-over-year. CoreWeave also raised prices 25% in July as capacity stayed sold out.
Elsewhere in AI infrastructure, IREN and Cipher Digital gained 5% as investors favored data-center exposure. CoreWeave's own management said recently signed deals carried margins five to 10 percentage points above recent levels, reflecting scarce capacity and favorable pricing.
Debt and losses persist despite the rally
Yet CoreWeave remains unprofitable, and operating expenses rose to $2.6 billion from $1.2 billion a year earlier, leaving an operating loss of $49 million, compared with operating income of $19 million in the same quarter last year. The company also carries $35.1 billion in total debt. Interest expense of $640 million in the second quarter is expected to rise to $860 million to $940 million in the third quarter against operating income of $200 million to $260 million.
Not every analyst is as bullish as Rosenblatt. Stifel maintained a Hold rating with a $120 price target. Citizens, meanwhile, reiterated a Market Outperform rating with a $180 price target, citing strong demand for compute capacity.
Sources: CNBC, CoinDesk, Investing.com
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