By Adam Levine
Fast growing AI-cloud provider CoreWeave reports its fourth-quarter earnings during a chaotic time for the AI trade. But current sentiment still favors AI data center owners, and that is CoreWeave's only business. The stock is up around 40% this year.
Triple-digit sales growth is the name of the game for CoreWeave, and that will be the first thing Wall Street analysts will look at when earnings are released. Revenue is expected to rise by 101% to $1.5 billion. This actually represents a slowdown, due to a delay in bringing a new data center online, and analysts expect growth to re-accelerate in 2026.
Investors will be expecting full-year 2026 guidance for sales and capital expenditures during the earnings conference call.
CoreWeave has an aggressive business model, trying to go from $16 million in 2022 revenue to a cloud giant as quickly as it can. Starting with a large Microsoft deal, CoreWeave has leveraged customer contracts with secure counterparties to borrow money to build expensive data centers. That results in rocket revenue growth, which gives lenders confidence to extend more capital. The company has a contract backlog of over $55 billion, mostly with marquee names like Microsoft, Meta Platforms and OpenAI.
Borrowing fuels capital expenditures that support sales growth, starting the cycle over again. At the end of September, CoreWeave had almost $19 billion in debt and lease liabilities.
CoreWeave is able to eke out a small operating profit, but this gets wiped out by interest expense. The Wall Street consensus is for a fourth-quarter loss per share of 50 cents, compared with a loss of 8 cents the year before.
CoreWeave has a very close relationship with AI-chip leader Nvidia, and its data centers use Nvidia hardware exclusively. Nvidia is a CoreWeave investor, customer, and also its most important supplier.
However earnings go, expect fireworks. After CoreWeave's last two earnings reports, the stock was down 21% and 16%, respectively, the next day. Since the stock was listed last March, its average daily move has been 5.5%. Shares are up 148% since then.
Contributing to the volatility of the stock is a constant drip of share sales from CoreWeave's most important early investor, a fund called Magnetar. At IPO, Magnetar owned 96 million shares, about a fifth of the company. At the end of March, its CoreWeave shares were 76% of the fund.
Once a provision to prevent insider sales expired in August, Magnetar began slowly but steadily selling shares to reduce its concentration risk. At the end of December, it owned 68 million shares, and those holdings were still worth about half the fund.
Write to Adam Levine at adam.levine@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
February 26, 2026 02:00 ET (07:00 GMT)
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