AI cloud provider CoreWeave (CRWV) will report its second quarter earnings after the bell on Tuesday, as hyperscalers continue to expand their capital expenditures to meet AI computing demand.
CoreWeave stock has plunged more than 30% since it last reported results in May, amid concerns about revenue growth and its spending plans.
For the second quarter, CoreWeave is expected to report adjusted loss per share of -$1.18, down 339% year-over-year. Revenue, however, is projected to climb 111% to $2.5 billion for the period, according to Bloomberg analyst consensus estimates. The company's operating margins are anticipated to decline 82% from the prior year to 2.86%.
CoreWeave is pouring billions into building data centers to host AI chips that companies like Meta (META) and Anthropic (ANTH.PVT) rent to power their own AI models and services.
Capital expenditures for the second quarter are estimated to top out at $7.9 billion. CoreWeave spent $2.4 billion in the same quarter last year.
Wall Street is anticipating the company's revenue backlog to increase 246% to $104.4 billion and for remaining performance obligations to grow 284% to $115.6 billion.
In a note to investors, BofA Global Research analyst Tal Liani wrote that the debate around CoreWeave is about its execution and says he'll be watching for more information about its data center activation, capital expenditures, and margin improvements through the end of the year.
But CoreWeave is also facing new competition in the form of SpaceX (SPCX), which has begun renting out computing capacity from its own data centers to Anthropic and Google (GOOG, GOOGL) worth billions of dollars.
Meta is also considering entering into the space, with CEO Mark Zuckerberg teasing the idea during prior investor calls and saying during an interview with Bloomberg that it could make sense for the company to rent out capacity.
Businesses around the world are eager to get their hands on as much compute as possible to power their various AI initiatives. And with chips and memory demand outstripping supply, organizations are willing to pay a premium to companies like Meta to get access to a portion of its capacity.
And for a company that's looking to offset some of the billions it's spending on its AI buildout, leasing capacity could make sense.
That, however, could put pressure on CoreWeave down the line.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley.
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