CoreWeave (CRWV) stock fell as much as 7% after company executives blew past Wall Street expectations for capital expenditures as the Nvidia-backed (NVDA) AI data center company burns through cash to buy up AI chips.

CoreWeave executives said in a call that the company expects to spend $20 billion to $23 billion in 2025, more than the $18.3 billion projected by Wall Street analysts, according to Bloomberg consensus estimates.

CFO Nitin Agrawal said that the higher spending is "fundamentally driven by increased customer demand."

The company is one of the largest holders of Nvidia’s graphics processing units and rents its data center capacity to Big Tech firms such as Microsoft (MSFT) and Meta (META) as they scramble to power their AI ambitions.

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The company's stock had jumped as much as 11% earlier in after-hours trading on Wednesday after it released its first earnings report as a public company. The results featured first quarter revenue that topped analyst estimates as well as a bullish outlook for the year.

CoreWeave reported revenue of $981.6 million for three months ending on March 31, ahead of the $862.3 million expected by Wall Street analysts, according to Bloomberg estimates.

The company projects revenue of $1.06 billion to $1.1 billion for the second quarter and $4.9 billion to $5.1 billion for the full year — higher than Wall Street analysts’ projections of $1.04 billion for the second quarter and $4.6 billion for the year, according to Bloomberg data.

CoreWeave attributed its higher revenue outlook to a deal with OpenAI as well as a new $4 billion deal with “a large AI enterprise” that the company announced Wednesday.

CEO Michael Intrator indicated the unnamed client is a Big Tech "hyperscaler," or a large-scale data center operator.

"With regards to the hyperscale client, there aren't that many hyperscalers, so you can look at our website and assume who the addition is." CoreWeave's Big Tech clients include Nvidia and IBM (IBM) in addition to Microsoft (MSFT) Meta (META).

"Demand for our platform is robust and accelerating as AI leaders seek the highly performant AI cloud infrastructure required for the most advanced applications," Intrator said in the company’s earnings release.

CoreWeave raised $1.5 billion in its IPO in March — much lower than the $4 billion it had initially hoped to raise — with the stock whipsawing as Wall Street and investors weighed its risky financials against bullish outlooks for AI demand. Ahead of Wednesday's earnings release, CoreWeave stock was up 66% since the company's market debut.

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Seven analysts tracked by Bloomberg hold a Buy rating on the stock, while nine hold Neutral ratings. Hedgeye Risk Management holds a short position on the stock.

DA Davidson analyst Gil Luria, who holds a Neutral rating on the stock, maintains skepticism over what he said is CoreWeave's “risky” capital structure and high customer concentration.

CoreWeave has a significant amount of debt: roughly $12 billion worth of debt commitments with high interest rates of 10% to 14%, according to Luria. CoreWeave uses its debt, borrowed against its store of Nvidia GPUs as collateral, to buy more Nvidia chips.Michael Intrator, Founder & CEO of CoreWeave, during the company's IPO at the Nasdaq Market, in New York City on March 28, 2025. REUTERS/Brendan McDermid·REUTERS / Reuters

“The risk is this is a company that is borrowing at extraordinarily high interest rates in order to buy a product [Nvidia GPUs] that depreciates very rapidly in terms of its economic value,” Luria told Yahoo Finance in an interview Wednesday.

Some 77% of CoreWeave's 2024 revenue came from just two customers, according to regulatory filings, with 62% coming from Microsoft (MSFT). And despite revenue hitting roughly $2 billion that year, the company still lost nearly $1 billion, according to a March filing with the Securities and Exchange Commission.

In regard to its customer concentration, CoreWeave said no customer made up more than 50% of its revenue at the end of its first quarter, but said that will not be the case going forward with its new $4 billion deal with the unnamed AI company.

CoreWeave, overall, is still losing money. The company reported an adjusted net loss of roughly $150 million for the first quarter, steeper than the $41.7 million loss expected, with its adjusted loss per share of $1.49, which was also greater than the projected $0.16 loss, per Bloomberg data.

“As long as this demand for AI services continues to grow exponentially, they'll be fine," DA Davidson analyst Gil Luria told Yahoo Finance in an interview Wednesday. If demand wanes, however, “this doesn't go well because this is a company with inherently low margins and low returns that is borrowing at very high rates.”

Other analysts maintain that booming AI demand means CoreWeave will succeed.

Macquarie analyst Paul Golding said in a note to investors Wednesday ahead of its earnings report that its “competitiveness, together with the outlook for the [AI] space, drives scope for further growth.”

After falling to a closing price low of $35 in April, CoreWeave shares have soared more than 50% over the past month, trading at $66 Wednesday.

Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at [email protected].

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