CoreWeave Stock Declines as Rising Costs Offset Record Revenue Growth

2026-02-27 companies

Roseland, Friday, 27 February 2026.
Despite boasting a staggering $66.8 billion backlog and 110% revenue growth, CoreWeave shares retreated following its Thursday earnings report. Investors are reacting cautiously to the company’s aggressive $30 billion capital expenditure plan for 2026, which threatens to compress near-term profit margins in a maturing AI infrastructure market.

Profitability Under Pressure

CoreWeave’s financial disclosure on Thursday revealed a complex picture that unsettled investors, sending shares down 5% in post-market trading [5]. While the cloud provider delivered fourth-quarter revenue of $1.57 billion—surpassing analyst estimates of $1.55 billion—bottom-line performance missed targets significantly [4]. The company reported an adjusted loss per share of $0.89, a figure considerably wider than the forecasted loss of $0.21 [2][5]. This variance was driven largely by an intense acceleration in infrastructure spending; adjusted capital expenditures for the quarter totaled $8.2 billion, well above the $6 billion projected by Wall Street [4]. Management attributed this spend to bringing infrastructure online ahead of schedule to meet insatiable demand [4].

Capital Intensity Weighs on Sentiment

The primary catalyst for the market’s bearish reaction appears to be the company’s aggressive spending forecast for the coming year. CoreWeave announced it expects 2026 capital expenditures to range between $30 billion and $35 billion, a figure that overshadows the consensus estimate of $27.2 billion [2][4][7]. While CEO Mike Intrator framed the spending as a necessary step to secure future revenue capacity, analysts expressed concern regarding the impact on near-term liquidity and margins [4]. Needham analyst Mike Cikos noted that the prioritization of capital spending continues to cut into profitability, complicating the evaluation of the company’s underlying unit economics [4]. Similarly, Bloomberg Intelligence analysts suggested that these greater-than-expected investments might force a downward revision of long-run profit assumptions [4].

Record Backlog and Demand Visibility

Despite the sticker shock regarding costs, the demand signals for CoreWeave’s AI infrastructure remain robust. The company exited 2025 with a contracted revenue backlog of $66.8 billion, representing a more than fourfold increase year-over-year [3][7]. This backlog provides exceptional visibility into future cash flows, with CFO Nitin Agrawal noting that the company is “virtually sold out” of capacity for 2026 [7]. Furthermore, the quality of these commitments appears to be improving; the average contract duration has extended from roughly four years to five years [7]. The company also reported that it added twice as many new reserved instance customers in the fourth quarter compared to any prior quarter, validating its position as a critical partner for AI-native companies and hyperscalers [7].

Strategic Outlook for 2026

Looking ahead, CoreWeave has issued strong top-line guidance, projecting fiscal year 2026 revenue between $12 billion and $13 billion, which would mark a significant leap from the $5.1 billion generated in 2025 [2][7]. The company aims to double its active power capacity to over 1.7 gigawatts by the end of 2026 to support this growth [2]. While the heavy investment cycle is expected to pressure margins in the first quarter of 2026, management anticipates a recovery to low double-digit margins by the fourth quarter as new capacity comes online and begins generating revenue [2][7]. Intrator characterized 2025 as a “defining year,” asserting that the accelerated infrastructure deployment positions the firm to capitalize on the next step function in computing power required by advanced AI models [2][3].

Sources

AI Infrastructure Cloud Computing