CoreWeave’s Revenue Skyrockets 300% to $1.2B in Q2—So Why Did Its Stock Crash After Hours?
Cloud infrastructure upstart CoreWeave just posted a monster quarter—tripling revenue to $1.2 billion. But Wall Street responded with a collective shrug (and a sell-off).
Behind the numbers: The hyperscale GPU provider is riding the AI boom, but investors seem spooked by sustainability questions. Typical finance herd mentality—piling in on hype, then bolting at the first whiff of uncertainty.
Key takeaway: Even triple-digit growth can't satisfy traders who've been burned by overvalued tech stocks before. Maybe they're finally learning? (Doubt it.)
Narrowing lead
Some observers contend the growth masks fragile economics, citing thin margins and depreciation assumptions on GPU lifespans.
“Even their adjusted operating margin for the quarter was only 16%, which doesn’t seem great for such a capital-intensive business,” Jeffrey Emanuel, founder and CEO of blockchain infrastructure firm Pastel Network, told Decrypt. “But then you have to remember that they’re depreciating all their H-100 GPUs assuming a straight line, six-year useful life.”
Emanuel noted that CoreWeave’s current machines are not “remotely competitive on price or performance” now that newer ones are out. Some echo this concern, warning that CoreWeave's edge is narrowing as rivals secure similar hardware.
“CoreWeave’s lead has come from securing NVIDIA’s newest GPUs first, but that edge fades as hyperscalers and specialist clouds catch up.” Ram Kumar, CORE contributor at decentralized AI platform OpenLedger, told Decrypt.
“Without faster margin expansion and locked-in utilization, they risk sliding from high-growth disruptor to low-return infrastructure landlord, especially in a price-war environment.”
Having “thin operating margins and heavy fixed costs” makes CoreWeave “more vulnerable than diversified hyperscalers to a demand pause,” Kumar added. “A slowdown in AI training budgets or customer consolidation could quickly squeeze cash flow, making long-term contracts and software-driven stickiness critical to resilience.”
CoreWeave’s accounting may also be masking deeper losses, Pastel Network’s Emanuel argues.
“If you adjust that depreciation expense to something even remotely realistic, like 2.5 or 3 years and front-loaded, they are losing money hand over fist. And that’s with the benefit of some very juicy contracts they signed during the frenzy for computer capacity,” he said.
CoreWeave did not immediately respond to Decrypt’s request for comment.
