CoreWeave Defends Aggressive Spending Amid Investor Sell-Off

CoreWeave CEO Mike Intrator made a public case for the company's ambitious capital plans Friday, as its stock fell sharply following earnings. In an interview on CNBC, Intrator addressed investor anxiety head-on, arguing that heavy spending is necessary to seize a historic surge in demand for AI computing power.

The company’s shares closed down 22% after it issued revenue guidance that disappointed Wall Street. The sell-off was fueled by CoreWeave’s announcement that it plans to spend between $30 billion and $35 billion next year—a figure well above analyst expectations—raising questions about future profitability.

Intrator pushed back against what he called a false narrative. "I understand the concerns," he said, "but our backlog is enormous." He described the current market as a unique opportunity, stating the company is consciously accepting lower margins now to build infrastructure for the long term.

CoreWeave’s business model involves borrowing heavily to buy advanced Nvidia chips, which it then leases to clients. A significant portion of its revenue comes from a concentrated group of major tech firms, including Microsoft and OpenAI. This reliance on debt and a few key customers has drawn scrutiny from analysts concerned about sustainability, especially if borrowing costs rise.

Intrator dismissed those concerns, stating the company’s cost of capital has actually fallen by 300 basis points in the past year, saving an estimated $700 million. He expects costs to keep declining.

Analysts remain cautious. Barclays suggested the stock may stagnate as investors assess the spending shift, while JPMorgan warned that CoreWeave shares could be particularly vulnerable in an economically volatile climate. The road ahead appears challenging as CoreWeave bets its future on an unprecedented infrastructure build-out.

Source: CNBC