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CoreWeave (CRWV) delivered its second quarterly earnings report since its March 28, IPO, facing lofty expectations fueled by a 43% stock surge in August and a rich valuation with a P/S ratio of approximately 13.5x based on the company's FY25 revenue projections of $5.15–$5.35 bln. This premium valuation set a high bar for the Q2 results, and despite robust performance, the market’s reaction reflects a classic sell-the-news dynamic. The stock is down sharply as the revenue beat of 12% versus analysts' estimates fell short of the prior quarter’s 15% outperformance, and ongoing profitability concerns, driven by a high debt load and widened losses, prompted investors to reassess the company’s near-term trajectory.

• Revenue growth remained impressive, with revenue soaring 207% yr/yr to $1.21 bln. However, not only was this beat less pronounced than last quarter, but CRWV's Q3 revenue guidance of $1.26–$1.30 bln represents upside of just 2% versus analysts' estimates, based on the midpoint of the guidance range. The more marginal upside underwhelmed investors who were looking for CRWV's top-line blowouts to continue, particularly given its position as a high-growth AI infrastructure provider.
• Profitability metrics raised further concerns, as CRWV’s adjusted net loss widened significantly to $(130.8) mln from $(5.1) mln in 2Q24, reflecting increased operational and financing costs. The GAAP earnings per share of $(0.60) also missed analyst expectations, underscoring the strain from a high debt load, which stood at $3.6 bln as of June 30, 2025, with interest expenses ballooning to $266.9 mln from $66.7 mln yr/yr. While adjusted EBITDA surged 201% to $753.1 mln, maintaining a strong 62% margin, this metric excludes the substantial interest expense, masking the impact of CRWV’s leverage on its bottom line and highlighting a key headwind for earnings growth.
• CRWV’s aggressive capacity expansion to meet surging AI-driven demand, exemplified by a $30.1 bln revenue backlog and partnerships with major clients like OpenAI, is set to pressure margins in the near term. The company forecasts Q3 adjusted operating income of $160–$190 mln, a decline from Q2’s $199.8 mln, reflecting increased capital expenditures and stock-based compensation costs as it scales infrastructure, including a new 250 MW data center in New Jersey slated for 2026.
• This strategic focus on growth over profitability aligns with CRWV’s long-term vision but introduces short-term margin compression that investors must weigh against its robust demand pipeline.

CRWV’s Q2 results underscore its exceptional growth, driven by a $30.1 bln revenue backlog and strategic partnerships with AI leaders like OpenAI, positioning it as a critical player in the AI infrastructure market. However, sky-high investor expectations, fueled by its post-IPO momentum and lofty valuation, have led to a sell-the-news reaction, with the modest revenue beat and persistent profitability challenges -- exacerbated by a high debt load -- prompting profit-taking after a 43% stock surge in August.