CoreWeave stock slumps 14% on wider-than-expected loss ahead of lockup expiration

CoreWeave's stock experienced a steep decline of 14% following the release of its quarterly financial results, revealing a larger-than-anticipated loss. In its second earnings report since going public, the AI data center provider announced an adjusted loss of 27 cents per share, surpassing analysts' expectations of a 21-cent loss, as reported by LSEG. The timing of these results coincides with the impending expiration of the lock-up period from its initial public offering, which is set to end Thursday evening. This situation raises concerns about potential volatility in the stock price. The lock-up period restricts insiders from selling their shares immediately after a company goes public. Analysts at Stifel expressed cautious optimism, stating, "We remain constructive long term and are encouraged by today’s data points, but see near-term upside capped by the potential CORZ-related dilution and uncertainty over the upcoming lock-up expiration." Their comments come in light of CoreWeave's recent acquisition of Core Scientific, whose shares also dropped by 7% on Wednesday. Looking ahead, CoreWeave anticipates revenue between $1.26 billion and $1.30 billion for the current quarter, a figure slightly above analysts' forecast of $1.25 billion. Additionally, the company raised its revenue guidance for 2025 to a range of $5.15 billion to $5.35 billion, up from a previous forecast of $4.9 billion to $5.1 billion. However, some analysts expected stronger guidance, especially given the stock's significant rise since its public debut in March. Concerns arose over light capital expenditure guidance and delays in spending until the fourth quarter, which were cited as potential weaknesses. Morgan Stanley analysts noted, "This delay in capex highlights the uncertainty around deployment time; as go-live timing is pushed, in-period revenue recognition will be smaller." CoreWeave reported that its revenue soared more than threefold year-over-year, reaching $1.21 billion, driven by the increasing demand for AI services, and exceeded Wall Street's expectations of $1.08 billion. Finance chief Nitin Agrawal emphasized that demand currently outstrips supply. The New Jersey-based firm, which counts major players like OpenAI, Microsoft, and Nvidia among its clients, also announced recent expansion agreements with hyperscale customers. Additionally, CoreWeave completed its acquisition of AI model monitoring startup Weights and Biases for $1.4 billion during this period and ended the quarter with a robust $30.1 billion revenue backlog.