coreweave On Friday, CEO Mike Intrater backed the company’s big spending plans in an interview with CNBC’s “Squawk on the Street,” even as the company’s stock price fell after the earnings call on concerns about profitability.
Intrater told CNBC that Coreweave was willing to invest in more infrastructure and sacrifice margins to meet “once-in-a-generation” capacity demands.
“I understand that people are concerned because they see us putting a lot of money into this market, but the reality is we have a huge backlog,” he said.
Coreweave’s stock price plummeted 22% following the disappointing earnings outlook. The New Jersey-based company also said it plans to spend between $30 billion and $35 billion in 2026. This exceeded FactSet’s forecast of $26.9 billion, raising concerns about profitability.
Recently, concerns have been raised about Coreweave’s debt burden and the long-term sustainability of its business model.
The company relies on debt to fund advanced AI purchases Nvidia I’ll lend you a chip. Most of the revenue also relies heavily on a small number of hyperscalers and AI companies, including: microsoft And OpenAI.
Asked whether credit market issues could lead to higher costs of capital, Intrater said he expected costs to continue to decline.
“Such a story exists, but the data does not support it in any way, shape or form,” he said. “Over the past 12 months, our cost of capital has declined by 300 basis points.”
Intrater said those 300 basis points represent a savings of $700 million when calculated across the company’s debt load, and costs have been reduced by 600 basis points over the past two years.
Wall Street analysts are bracing for a choppy road ahead as Coreweave’s massive infrastructure overhaul squeezes profits and drives up costs.
Barclays analysts expect the stock to stay around these levels as investors assess changes in spending.
“If economic volatility increases, CRWV stock will likely suffer unfairly due to its risk-off stance,” JPMorgan analysts said.
Coreweave’s 1-year stock price chart.
