CoreWeave (CRWV) Stock Down 30% Following Q3 Earnings and Guidance Cut

TLDR

• CoreWeave shares plunged nearly 30% after reducing 2025 revenue guidance to $5.1 billion from $5.25 billion
• Q3 backlog reached $55.6 billion, jumping 85% quarter-over-quarter with major OpenAI and Meta contracts
• The stock trades around $77 but remains up 108% year-to-date despite recent losses
• Analysts split with average price target of $146.17 implying 89% upside potential
• Company faces profitability pressure with 4% operating margins and $8 billion negative free cash flow

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CoreWeave stock crashed this week following a revenue guidance cut. The AI cloud infrastructure provider dropped its 2025 forecast to $5.1 billion from $5.25 billion.

CoreWeave, Inc. Class A Common Stock, CRWV

The company cited delays at a major data center and compute supply constraints. Shares fell nearly 30% over five trading days. The stock now trades around $77, moving closer to its March 2025 IPO price of $40.

Despite the selloff, CoreWeave remains up over 108% year-to-date. Strong AI computing demand has driven the gains throughout most of 2025.

Q3 revenue hit $1.36 billion, more than doubling year-over-year results. But the revenue cut spooked investors who were expecting continued momentum.

Backlog Growth Tells Different Story

CoreWeave’s contracted revenue paints a brighter picture. The company reported a $55.6 billion backlog in Q3. That represents an 85% increase from the previous quarter.

OpenAI committed $22.4 billion in multi-year contracts. Meta locked in a $14.2 billion deal extending through 2031. These massive agreements provide long-term revenue visibility.

Nvidia holds a 7% stake in CoreWeave. The chip maker also guaranteed $6.3 billion in capacity through 2032. This ensures revenue generation even for unused GPUs.

New customer wins continue rolling in. CrowdStrike, Rakuten, Poolside, and Jasper recently signed on. Demand for AI cloud services shows no signs of slowing.

Profitability Concerns Mount

The revenue growth comes at a steep cost. CoreWeave posted $8 billion in negative free cash flow over the trailing 12 months. The company is pouring money into building AI data centers.

Operating margins sit at just 4%. Interest expenses on the company’s debt load pushed net income negative. Some analysts believe CoreWeave is winning deals by undercutting competitor pricing.

Wall Street Divided on Outlook

Compass Point analyst Michael Donovan initiated coverage with a Buy rating. His $150 price target reflects confidence in the massive backlog and Nvidia partnership.

J.P. Morgan’s Mark Murphy downgraded the stock to Hold. His $110 target suggests limited near-term upside. Murphy acknowledged supply issues that pushed revenue into future quarters.

The consensus among 26 analysts shows 13 Buy ratings, 12 Hold ratings, and one Sell. The average price target of $146.17 implies 89% upside from current levels.

CoreWeave now carries a $39 billion market cap. The company has taken on debt to fund its infrastructure expansion. Growing interest costs continue pressuring already thin margins.

The revenue guidance cut appears reflected in the stock price after this week’s drop. Investors now weigh whether the selloff created a buying opportunity or signals deeper profitability challenges ahead.

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