CoreWeave (CRWV.US) Q2 backlog orders and spending are lagging behind. Investment banks such as Citibank suggest short-term risk but long-term bullish

The Zhitong Finance App learned that the Nasdaq-listed AI infrastructure provider CoreWeave (CRWV.US) stock price plummeted 20.83% at the close of trading on Wednesday. The second-quarter earnings report previously released by the company showed strong revenue growth, but the backlog of orders and capital expenditure performance fell short of expectations. Despite negative short-term market reactions, many investment bank analysts are optimistic about its long-term growth potential.

According to CoreWeave's earnings report, second-quarter revenue doubled year-on-year to US$1.21 billion, better than market expectations of US$1.08 billion. Adjusted net loss increased to US$130.8 million, compared to US$5 million in the same period last year. The market previously predicted a loss of US$96.3 million. Last quarter, the company's capital expenditure was $2.9 billion, more than $1 billion higher than in the first quarter.

Citigroup analyst Tyler Radke's team pointed out in the research report that CoreWeave's backlog of orders in the second quarter reached 30.1 billion US dollars, which is higher than the previous quarter's 25.9 billion US dollars, but considering the previously known new OpenAI contract of 4 billion US dollars, the actual quarterly contract amount was only 1.4 billion US dollars, which is slightly lower than market expectations. However, the company announced an expansion agreement with another hyperscale customer, which indicates the possibility of future expansion. In terms of capital expenditure, the company actually invested 2.9 billion US dollars in the second quarter, lower than Citi's forecast of 3.3 billion US dollars, mainly affected by adjustments in the project pace. Citi maintains a “buy” rating for the stock and a target price of $160.

Barclays Raimo Lenschow's team mentioned that CoreWeave has signed expansion agreements with two hyperscale customers in the past eight weeks, while adding more native AI customers and enterprise users, and the business is growing significantly. However, the short-term market focus will focus on the sales ban period that expires on Thursday evening and the progress of the CORZ merger with the target of the proposed acquisition. As key indicators such as operating cash flow, capital expenditure, and operating profit margin fell short of expectations this quarter, stock prices may be under pressure in the short term despite continued strong revenue. Barclays maintains an “equal weight” rating and a target price of $140.

Mark Murphy's team at J.P. Morgan believes that the company's various operating indicators are strong, the strategic direction is correct, and that it continues to benefit from the long-term development trend of AI, and reaffirms the “gain” rating and target price of $135.

Stifel analyst Ruben Roy's team pointed out that the medium-term forward-looking guidance was divided: the revenue forecast for the third quarter of 2025 was 1.28 billion US dollars (higher than the market estimate of 1.25 billion US dollars), the revenue forecast for the fiscal year 2025 was 5.25 billion US dollars (higher than the estimated 5.17 billion US dollars), but the profit margin indicators fell short of expectations. The adjusted profit for the third quarter was 175 million US dollars (lower than the estimated US$199.4 million), and the adjusted profit for the fiscal year was 815 million US dollars (lower than the estimated US$818.6 million). Management explained that the move was due to conservative considerations. Stifel believed this was the main reason for the pressure on the stock price after the earnings report, so it maintained the “hold” rating and raised the target price slightly from $115 to $120.

Up to now, CoreWeave's stock price has accumulated a cumulative increase of nearly 200% since its IPO in March this year. Among the main competitors, Amazon (AMZN.US) rose 1.4%, Microsoft (MSFT.US) fell 1.64%, Google (GOOGL.US) fell 0.68%, and European AI hyperscale service provider Nebius (NBIS.US) fell 6.24% at the close of Wednesday.