CoreWeave Stock Craters Amid Mounting Debt Pressures
Debt costs eclipse profits as CoreWeave’s AI cloud expansion runs headlong into rising interest rates and investor unease.

CoreWeave’s meteoric rise in the AI infrastructure race hit a wall on Wednesday as shares plunged nearly 20 percent after the company’s latest earnings report revealed a stark reality: its operating income outlook is deteriorating faster than investors expected. The New Jersey-based AI cloud firm, once hailed as a bellwether for AI demand, is now battling a dangerous imbalance between revenue growth and ballooning interest costs.
The company told investors it expects third-quarter operating income between $160 million and $190 million, falling short of Wall Street’s $192 million forecast. More troubling, CoreWeave projected interest expenses between $350 million and $390 million in the same period. The math is unforgiving — its debt costs are nearly double its profits, a glaring red flag in the eyes of analysts.
DA Davidson’s Gil Luria did not mince words, telling Yahoo Finance the numbers underscore the “main issue” for CoreWeave: it isn’t generating enough profit to service its debt. The warning echoes concerns that even as the AI boom lifts demand, the company’s financial foundation may be eroding.
The second-quarter results provided little comfort. Operating income came in at $200 million, well below the $267 million in interest expense, indicating the gap is widening. CoreWeave also posted a net loss of $0.27 per share, missing analyst estimates of a $0.19 loss, despite revenue topping forecasts at $1.21 billion versus $1.08 billion expected.
Chief Executive Michael Intrator struck an optimistic tone, pointing to “unprecedented demand” for CoreWeave’s AI cloud services, which lease high-performance Nvidia chips to tech giants such as Microsoft, Meta, and Google. Yet, the market reaction suggested that investors are weighing near-term financial strain more heavily than long-term potential.
CoreWeave’s business model hinges on rapid expansion, supplying computing power to Big Tech firms scrambling to scale their AI operations. For now, these partnerships remain a major strength, but critics warn they could be fleeting. If customers choose to build out their own data centers, CoreWeave’s revenue pipeline could face a sudden contraction.
