Shares of CoreWeave (CRWV +6.22%) are falling on Tuesday, down 14.4% as of 2:27 p.m. ET. The move came as the S&P 500 (^GSPC +0.17%) gained 0.2% and the Nasdaq Composite (^IXIC +0.09%) lost 0.2%.
The artificial intelligence (AI) cloud computing provider reported its Q3 earnings after the closing bell on Monday. While it more than doubled its revenue year over year (YOY), its guidance fell short of sky-high expectations.
NASDAQ: CRWV
Key Data Points
CoreWeave expects less revenue in 2025
CoreWeave reported $1.36 billion in revenue for the quarter -- a 134% increase YOY -- topping Wall Street's target of $1.29 billion. The company also reported a net loss of $110.1 million, representing a significant improvement over the $359.8 million loss in Q3 last year.
Despite the rapid sales growth and shrinking net loss, CoreWeave's earnings contained some concerning figures as well. The company's gross margins shrank, hitting their lowest point since Q1 2024, while its operating margins fell from 20.1% in Q3 2024 to just 3.8%.
Image source: Getty Images.
Investors were also concerned to learn that the company now expects its full-year revenues to come in between $5.05 billion and $5.15 billion, well below the analyst average of $5.29 billion.
CoreWeave can't slow down
CEO Mike Intrator assured investors that the dip in guidance was due to a third-party developer and didn't reflect a slowdown in demand. While this may be true for this quarter, today's major dip in stock price, which followed just the hint of a slowdown, shows just how volatile CoreWeave stock is.
Shares are priced for perfection. If CoreWeave can't deliver that -- and I don't think it can over the long term -- the stock price could plummet. I would not own CoreWeave.
