CoreWeave’s stock experienced a significant decline following its first earnings report since going public. The data center company’s increasing capital expenditure has raised concerns among investors. Initially, shares dropped over 13% during after-hours trading but rebounded slightly the following morning. CoreWeave, backed by Nvidia, is a major player in the AI revolution, leasing data center capacity to large tech companies. Executives announced an expected expenditure of between $20 billion and $23 billion in 2025, surpassing Wall Street projections of $18.3 billion. Analysts have downgraded their outlook for CoreWeave stock due to its high capital intensity and rising interest expenses, which increased by 549% in the first quarter. Additionally, operating costs surged by 487%, totaling over $1 billion. This trend mirrors other tech giants like Microsoft, Amazon, and Alphabet, which have also faced market backlash for heavy investments in AI-related infrastructure.
— new from qz.com
