TLDR
- CoreWeave Stock dropped 8.63% in pre-market trading following its third-quarter earnings report.
- The company reported a 134% year-over-year revenue increase but a net loss of $110 million for Q3.
- JPMorgan downgraded CoreWeave Stock from Overweight to Neutral with a reduced price target of $110.
- CoreWeave revised its 2025 full-year revenue guidance down to $5.05 billion to $5.15 billion due to supply chain disruptions.
- The company’s revenue backlog nearly doubled to $55.6 billion, fueled by contracts with clients like Meta and OpenAI.
CoreWeave Stock (CRWV) saw a sharp decline after its third-quarter 2025 earnings report. The company’s stock dropped 8.63% in pre-market trading, reaching $96.50. This drop followed a downgrade by JPMorgan, raising concerns over the company’s supply chain issues despite strong revenue growth.
CoreWeave Stock Struggles Despite Strong Bookings
CoreWeave’s third-quarter report showed a 134% year-over-year revenue increase, reaching $1.36 billion. This exceeded analyst expectations of $1.29 billion. However, the company reported a net loss of $110 million, improving from a loss of $360 million in Q3 2024.
JPMorgan downgraded CoreWeave Stock from Overweight to Neutral. The analyst also reduced the price target from $135 to $110. The downgrade followed concerns about delays linked to a third-party data center developer affecting CoreWeave’s growth prospects.
Operating expenses for the quarter increased to $1.31 billion, including $144 million in stock-based compensation. These rising expenses raised concerns about profitability. Despite strong bookings, market sentiment shifted negatively due to the company’s failure to meet delivery timelines.
Supply Chain Challenges Impacting Full-Year Guidance
CoreWeave reduced its full-year 2025 revenue guidance following the delays. The company now expects revenue between $5.05 billion and $5.15 billion, slightly below the previous estimate. This revision highlights ongoing supply chain disruptions, which continue to affect the company’s growth trajectory.
Despite the reduced guidance, CoreWeave’s revenue backlog nearly doubled to $55.6 billion. Major contracts with clients like Meta and OpenAI helped fuel this growth. However, these positive signs were overshadowed by the ongoing supply chain delays that affected CoreWeave’s immediate business operations.
CoreWeave Stock’s performance had been strong earlier this year, rising 164% year-to-date. However, the downgrade reflects market uncertainty about the company’s ability to meet short-term demand due to the supply chain issues. The analyst concerns indicate difficulty in forecasting CoreWeave’s future earnings potential.
Strategic Partnerships Continue Despite Setbacks
CoreWeave continues to build its presence in the AI cloud infrastructure market. The company recently expanded its partnership with OpenAI, securing a new contract worth up to $6.5 billion. This brings the total value of their collaboration to $22.4 billion.
Despite the challenges, CoreWeave’s long-term prospects remain largely intact. The expanded partnership with OpenAI supports the company’s involvement in the “Stargate” project, which aims to deliver 10 gigawatts of computational capacity. CoreWeave’s role in such high-profile projects bolsters its future position in the market.
CoreWeave Stock faces near-term headwinds due to the ongoing supply chain issues, but its long-term outlook remains strong. The company’s collaboration with OpenAI and growing revenue backlog provide a solid foundation for future growth. However, until supply chain issues are resolved, investor sentiment will likely remain cautious.
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