TLDR
- Analysts expect Q2 revenue of $2.6 billion, up 111% year over year
- CoreWeave stock has dropped more than 30% since its last earnings report in May
- Capital expenditures for Q2 are estimated at up to $9 billion, with $25 billion in debt on the balance sheet
- Adjusted pre-tax income is not expected to turn positive until 2028
- New competition is emerging from SpaceX, which is renting compute capacity to Anthropic and Google
CoreWeave reports second quarter earnings after the bell on Tuesday, and Wall Street will be watching closely.
CoreWeave, Inc. Class A Common Stock, CRWV
Analysts expect revenue of $2.6 billion for the quarter, representing 111% growth from the same period last year. That would continue a run of triple-digit growth that has taken the company from $16 million in annual sales in 2022 to an estimated $12.6 billion this year.
The stock was trading at $88.19 at Monday’s close, down 2.74% on the day. It has fallen more than 30% since CoreWeave last reported results in May.
CoreWeave is burning through cash at a rapid pace. Capital expenditures for Q2 are guided at up to $9 billion, compared to $2.4 billion in the same quarter last year.
The company had $25 billion in debt on its balance sheet as of March, with $8.8 billion in untapped facilities. It has since secured up to $14 billion in additional financing, including a $1 billion equity investment from hedge fund Jane Street.
Depreciation and interest together consumed 81% of Q1 revenue. The company reported an adjusted pre-tax loss of $491 million last quarter, up from $104 million a year earlier.
Analysts project adjusted loss per share of -$1.18 for Q2, down 339% year over year. Operating margin is expected to decline 82% from the prior year to around 2.86%.
The Backlog Picture
Wall Street will also focus on CoreWeave’s revenue backlog, which is expected to grow 246% to $104.4 billion. Remaining performance obligations are projected to climb 284% to $115.6 billion.
The existing backlog is largely made up of AI cloud contracts from Microsoft, Meta, OpenAI, and others. The size of that pipeline has been a key argument for long-term bulls on the stock.
Profitability on an adjusted pre-tax basis is not expected to arrive until 2028.
Competition and Insider Activity
CoreWeave is facing a new competitive threat. SpaceX has begun renting computing capacity from its own data centers to Anthropic and Google. Meta is also weighing entry into the market, with CEO Mark Zuckerberg raising the idea on investor calls.
Nvidia remains a close partner. It holds a 9% stake in CoreWeave and has committed $6.3 billion to backstop idle server capacity in CoreWeave data centers.
On the insider front, CEO Michael Intrator sold 307,692 CRWV shares last week at an average price of $91.80. Since insiders were permitted to begin selling roughly a year ago, the stock has declined 10%, while the S&P 500 has gained 20% over the same period.
BofA analyst Tal Liani said he will be watching for updates on data center activation timelines, capital expenditure guidance, and margin improvement progress through year end.
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