CoreWeave Plunges 10% on AI Spend Woes; Lock-up Expiry Looms

TradingKey - Cloud services provider CoreWeave reported quarterly results on Tuesday, showing a net loss far exceeding analyst forecasts, sending shares tumbling 10% in after-hours trading amid the rapid adoption wave of artificial intelligence (AI) tools.

Source: Google Finance

CoreWeave’s net loss reached $290.5 million for the quarter—more than 50% wider than the $190.6 million average estimate compiled by London Stock Exchange analysts.

The company is accelerating data center and cloud infrastructure expansion to meet surging AI demand, including substantial debt financing and capital expenditures. Capex surged to a record $2.9 billion this quarter, intensifying near-term financial pressure.

"We are scaling rapidly as we look to meet the unprecedented demand for AI. Our biggest challenge is finding infrastructure capacity at the scale customers require," CEO Michael Intrator acknowledged during the earnings call.

CFO Nitin Agrawal added that “the timing of data-center capacity coming online and generations of GPUs being placed into service could drive significant variation quarter to quarter.”

This moment is particularly sensitive for CoreWeave and its investors. The company faces its first major stock lock-up expiration since its March IPO this week—marking the initial opportunity for early investors who backed the company’s public debut to sell shares in the open market.

On the expiration date, the volume of freely tradable shares will substantially increase, potentially triggering short-term selling pressure and price volatility.

CoreWeave’s stock has already retreated nearly 30% from its post-IPO high. If the lock-up expiration coincides with prices near or below key early investors’ cost basis, selling pressure could intensify further.

However, Wall Street analysts contend that CoreWeave’s strong fundamentals and sustained AI market demand may absorb the increased float volatility. They note the lock-up event isn’t necessarily negative, but could represent a medium-to-long-term investment opportunity.