CoreWeave (NASDAQ:CRWV) shares tumbled in early trading as the AI cloud-computing startup posted a wider-than-expected loss for the second quarter.
It reported a net loss of $290.5 million, above Street estimates of a loss of $190 million.
A loss per share of $0.60 missed estimates of a loss per share of $0.52.
Revenue surged to $1.21 billion from approximately $395,000 in the year-ago quarter, above Wall Street estimates of $1.08 billion.
The company’s revenue backlog increased to $30.1 billion, up 4% quarter-over-quarter.
Analysts at Bank of America noted the second quarter was solid, but lowered their price objective on ‘Neutral’-rated CoreWeave to $168 from $185, citing near-term overhang from the company’s acquisition of Core Scientific.
“While the magnitudes of the Q2 topline beat and Q3 raise were slightly below the Q1 print, results were solid, validating that Coreweave remains well positioned as a leading AI infrastructure vendor,” they wrote.
“A 4% quarter-over-quarter ramp in backlog, excluding OpenAI, is somewhat disappointing in our view, though does not include a second announced expansion deal, to be included in Q3.”
On the Core Scientific deal, the analysts see speculation about regulatory scrutiny dampening investor sentiment.
“Finally, the lockup expires on Friday, which is likely to place pressure on the shares,” they wrote. “However, we believe Coreweave remains well -positioned to benefit from a ramping AI infrastructure industry.”
They also highlighted that CoreWeave maintained its full-year capital expenditures (CapEx) guidance of $21.5 billion at the midpoint.
“Given the bullish demand commentary from management and strong trends, investors likely expected an upward revision to the full year CapEx guide as Coreweave builds out capacity to service the growing backlog,” they wrote.
“However management felt confident that the guide was reflective of capacity constraints which should be transitory versus deterioration of demand.”
Shares of CoreWeave fell 11.4% to about $132 in early trade on Wednesday.