Take a Nap, Bears: Revenue Surge at CoreWeave Calms AI Spending Worries

Winter is nigh upon us and CoreWeave would like to send the bears that dragged its stock down 30% on the year before Wednesday into hibernation.

The New Jersey-based cloud computing company has seen its capital-intensive business model come under heavy scrutiny in recent weeks, but shares in CoreWeave closed up 24.7% yesterday after its latest earnings report eased some of the market’s biggest concerns. Many analysts still aren’t holding their breath.

Anxiety Another Day

As a key infrastructure operator supporting the AI boom, CoreWeave has added customers galore in the last year. No problem there. It’s the company’s heavy spending on new projects and the resulting, even heavier debt load that left many investors seeing a big, giant flashing R-I-S-K sign. Since last month, the spread on five-year credit default swaps on CoreWeave, basically an insurance policy on the possibility that the company defaults, has exceeded 1,100 basis points over benchmark rates. Anything above 1,000 is widely considered distressed debt territory. The yield on the company’s 2031 bond was as high as 16% last week, and about 15% on Wednesday, which tells you all you need to know about the risk premium markets are demanding. And Wednesday’s report confirmed that CoreWeave’s interest expenses for the first nine months of 2026 were $2 billion, more than double the $841 million in the same period a year earlier. 

What’s more, its $66 billion in debt and lease liabilities were up from $52 billion in the second quarter.

But CoreWeave’s third-quarter earnings rebuffed many doubters head-on. The company’s record $3.7 billion revenue grew 168% year over year and bested forecasts. Executives expect $4.8 billion of revenue in the final three months of the year, also better than Wall Street’s projections. Although the company’s net loss widened to $709 million from $110 million a year earlier, CoreWeave’s revenue backlog reached $132.5 billion, up from $104 billion at the end of the second quarter. The compute demand is real and the lineup of customers demanding its services is set to ease credit concerns. CEO Michael Intrator said during an earnings call that CoreWeave will rely less on debt to fund its capital spending, which is on pace to hit $39 billion in 2026. Instead, the company will use deposits and prepayments from customers, which it expects to receive $9 billion of in the current quarter alone. Even as analysts kept their guard up, they offered praise for the new direction:

• “They’re continuing to mature as a company, executing better with every print and managing the narrative more competently than they ever have. … But we just can’t get over our long-term fundamental concerns about this business model,” wrote Bernstein analysts in a note, adding “we want to be believers.”
• “We’re encouraged by this print, but investors need more confidence in the underlying economics of the business,” said UBS analysts.

AI Rising Tide: If anything, Wednesday showed what a key barometer CoreWeave has become for the AI trade as a whole. Shares in more than a dozen prominent companies tied to the AI boom climbed more than 10%, including cloud provider Nebius Group, data center fuel cell provider Bloom Energy, high-speed optical transceiver-maker Lumentum, AI-optimized server provider Dell and semiconductor designers Arm Holdings and Micron Technology. “You could almost hear the sigh of relief in the AI market as [CoreWeave] posted solid results,” wrote JPMorgan analysts.