By CoreWeave shares CRWV surged nearly 26% on Wednesday, offering some relief to investors after a brutal month that saw the AI cloud provider lose more than 40% of its market value.
The rally came helped technology stocks stage a broader recovery, with the Nasdaq Composite gaining 2%.
Other AI infrastructure stocks also rebounded, with Nebius and IREN joining the recovery as investors reassessed concerns surrounding the sustainability of AI spending.
The stock had become a focal point of concerns around debt-funded AI infrastructure investments but strong earnings and guidance have led to a rebound, easing pressure on the larger AI trade.
Why is CoreWeave stock rising?
CoreWeave reported third-quarter revenue of $3.66 billion, up 168% year over year and ahead of Wall Street expectations of $3.55 billion.
The neocloud adjusted loss per share of 95 cents was also narrower than the expected loss of $1.16.
The company raised its 2026 revenue forecast to between $13 billion and $13.3 billion, above its previous outlook.
Its contracted revenue backlog reached $132.5 billion, up from $104 billion at the end of June, highlighting continued demand for AI computing capacity.
The biggest relief for investors came from management’s comments on financing.
CoreWeave expects approximately $9 billion in customer prepayments and deposits over the next three months and said it does not intend to issue additional parent-level unsecured debt through 2027.
Another key point helping sentiment was that the company also expects to become adjusted net income positive in the first half of 2028.
What analysts are saying
Wall Street analysts did not change their ratings or price targets despite the report, even as they said the earnings brought a sigh of relief in the AI market.
“You could almost hear the sigh of relief in the AI market as CRWV posted a solid results that extended the margin story that took hold last quarter,” JPMorgan credit analyst Thomas Egan wrote in a Wednesday note.
JPMorgan continued with its Overweight rating and a price target of $125.
Barclays analyst Raimo Lenschow also said that the results will calm investors’ credit-related nerves thanks to the solid revenue growth.
Citi maintained its Buy rating with $128 and said that “the results show CoreWeave continues to execute on the controllables and support our view that the AI compute demand environment remains unquestionably strong.”
However, other analysts were not as impressed.
UBS said that bringing confidence back will be a multi-quarter fix as “investors need more confidence in the underlying economics of the business.” UBS also maintained Buy rating with price target of $105.
Bernstein’s Madison Rezaei also was not fully sold on the recovery as she said the company’s fundamentals remain shaky. It kept the Underperform tag for the stock with a price target of $54.
Debt remains challenge
Despite the rally, CoreWeave’s financial position remains a concern.
The company had approximately $46.9 billion in total debt at the end of September, while third-quarter net interest expense reached $846 million.
Interest expenses could rise to between $1.05 billion and $1.15 billion in the fourth quarter, illustrating the cost of financing such a massive infrastructure expansion.
CoreWeave also expects capital expenditures of $37 billion to $39 billion in 2026.
The latest results have helped ease immediate financing fears, but the longer-term test will be whether CoreWeave can convert its enormous backlog into sustainable cash flow and profits.
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