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CoreWeave Beats Q2 Revenue Estimates on AI Demand but Posts Larger Loss

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Cloud services provider CoreWeave exceeded second-quarter revenue expectations on Tuesday, driven by strong demand for AI infrastructure, but a larger-than-expected net loss pushed its shares down 10% in after-hours trading.

REVENUE AND BACKLOG

  • Q2 revenue: $1.21 billion (est. $1.08B)

  • Revenue backlog: $30.1 billion as of June 30, up from $25.9 billion on March 31

  • Annual revenue forecast: Raised to $5.15–$5.35 billion from prior $4.9–$5.1 billion

LOSSES AND COSTS

  • Net loss: $290.5 million (est. $190.6M)

  • Operating expenses: Jumped to $1.19 billion from $317.7 million a year earlier
    CEO Michael Intrator noted the main challenge is accessing power shells to support AI infrastructure at scale.

AI GROWTH AND STRATEGY
CoreWeave operates 33 AI data centers in the U.S. and Europe and provides access to Nvidia chips for enterprises training large AI models.
The company highlighted rising demand for AI inference, particularly chain-of-thought reasoning models, which significantly increase computational requirements.

M&A AND CUSTOMER CONCENTRATION

  • CoreWeave’s $9 billion all-stock acquisition of Core Scientific will secure 1.3 GW of power under contract, though some shareholders oppose the deal.

  • The company acknowledged that its reliance on large customers like OpenAI is both a strategic advantage and a potential risk.

  • Contracts with hyperscalers have been expanded to meet growing demand.

MARKET RESPONSE
Shares fell 10% after-hours to $133.71, despite nearly tripling since the March IPO. Analysts noted that strong revenue visibility is tempered by cost growth and customer concentration risks.

Two Seas Capital Opposes $9 Billion Core Scientific–CoreWeave Merger

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Two Seas Capital, the largest shareholder of crypto mining firm Core Scientific, announced it will vote against the company’s proposed $9 billion sale to AI-focused data center operator CoreWeave. The investment firm, which holds about 6.3% of Core Scientific’s shares, argues the deal “materially undervalues” the company and poses unnecessary risks to shareholders.

CoreWeave, which provides access to Nvidia-powered AI chips and data centers, agreed last month to acquire Core Scientific in an all-stock transaction valued at $20.40 per share. The deal aims to repurpose Core Scientific’s energy-intensive sites—originally built for cryptocurrency mining—to support growing AI infrastructure needs.

Two Seas says it is not opposed to a merger in principle but insists the board must secure terms that reflect the strategic worth of Core Scientific’s assets. The firm believes the current proposal “decidedly and unfairly favors CoreWeave.”

Core Scientific’s stock dropped over 17% when the merger was first announced, though it was marginally higher Thursday. CoreWeave’s shares rose 6% at the time of the announcement but remained unchanged on the latest news.

Core Scientific, which emerged from bankruptcy in early 2024, has been shifting its business model toward AI-driven energy utilization. The company previously rejected an unsolicited bid from CoreWeave in June 2024, citing undervaluation concerns.

CoreWeave to Acquire Core Scientific in $9 Billion AI Infrastructure Deal

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CoreWeave announced on Monday it will acquire bitcoin miner Core Scientific in an all-stock deal valued at approximately $9 billion, as AI infrastructure companies intensify efforts to secure energy and data center capacity to meet surging demand. The deal reflects a broader trend where crypto firms—once focused on digital assets—are becoming essential to powering artificial intelligence workloads.

Core Scientific shareholders will receive 0.1235 CoreWeave shares for each of their shares, valuing the company at $20.40 per share—a 66% premium from the stock’s last closing price before deal talks emerged in late June. Despite this, Core Scientific shares dropped 22% in early trading Monday, while CoreWeave shares slid 4.5%.

The acquisition is expected to close in Q4 2025, with the final price set at that time. CoreWeave CEO Michael Intrator said the deal will “accelerate our strategy to deploy AI and HPC workloads at scale” and eliminate over $10 billion in future lease liabilities over 12 years.

A Strategic Pivot from Crypto to AI

Bitcoin miners, known for their energy-intensive operations, are increasingly being courted by AI companies. CoreWeave will gain control of Core Scientific’s 1.3 gigawatts (GW) of contracted power—critical capacity in the tight market for AI data center expansion.

Analyst Gautam Chhugani of Bernstein noted that the deal “sets the bar” for other crypto miners considering an AI pivot, with power supply emerging as a key bottleneck for the AI industry.

Founded in 2017 as an Ethereum miner, CoreWeave pivoted toward AI following Ethereum’s “Merge” upgrade in 2022, which rendered mining unprofitable. Since then, its revenue has surged, growing over eightfold in 2024, according to its IPO prospectus. The company now has a market valuation of about $79 billion.

A Turnaround Story for Core Scientific

Core Scientific filed for bankruptcy in late 2022, hit hard by plummeting bitcoin prices and soaring energy costs. It emerged in early 2024 with a renewed strategy, signing 12-year agreements with CoreWeave to lease out data center capacity—including one deal for 200 MW of infrastructure for AI computing.

The merger marks a dramatic turnaround and a strategic shift for Core Scientific, from mining crypto to becoming a foundational pillar of AI infrastructure.

Goldman Sachs advised CoreWeave on the transaction, while Moelis & Co and PJT Partners advised Core Scientific.