CoreWeave Shares Rally 25% on Q3 Revenue Beat

CoreWeave stock rallied 25% on Wednesday as surging third-quarter revenue and customer prepayments drove a tech market recovery.

The Nasdaq Composite jumped 1.60% to end at 25,466.19, according to CNBC market updates. The S&P 500 advanced 1.31% to 7,619.38. The Dow Jones Industrial Average added 254.60 points, or 0.49%, closing at 52,486.49.

CoreWeave Posts Q3 Revenue

The neocloud infrastructure provider reported $3.66 billion in third-quarter revenue, surpassing Bloomberg consensus estimates of $3.56 billion, Yahoo Finance reported. CoreWeave posted a net loss of $709 million alongside $846 million in quarterly interest expense. A loss per share of $1.27 came in narrower than the $1.46 expected by Wall Street.

“Demand for compute is growing faster than the capacity to deliver that infrastructure and that is being echoed by the expansion of the margins that we are seeing on each additional contract,” said Michael Intrator, co-founder and chief executive officer of CoreWeave, during the company’s earnings call.

Demand is growing. The company raised its full-year revenue guidance to a range of $13 billion to $13.3 billion, up from a target of $12 billion to $13 billion.

CoreWeave Funds AI Growth

CoreWeave announced it expects about $9 billion in customer prepayments and deposits over the next three months to fund its infrastructure buildout and a backlog of $132.5 billion, TechCrunch reported. That total includes more than $3 billion tied to signing new customer contracts for capacity that is already built.

“We will not use the unsecured debt market to fund our business at current yields, nor do we need to,” Intrator said.

The company also adjusted its pricing strategy, raising prices by about 25% in July and another 10% later in the quarter. CoreWeave is allocating more capacity to short-term deals under terms where pricing exceeds $40 million per megawatt annually. Four- and five-year contracts move to $20 million to $25 million per megawatt.

Markets Rebound With Nvidia

The equity recovery was aided by a 2.9% climb in Nvidia stock, which rebounded after falling nearly 10% at the start of the week.

“The sentiment bump coming from CoreWeave results and Anthropic IPO demand is helping the broader ecosystem,” said Ross Mayfield, an investment strategist at Baird Private Wealth Management.

Earlier coverage: Dow Futures Rally 500 Points as Oil Prices Drop; Traders Brace for More Data and Earnings: Live Updates