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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.

SoftBank Acquires Foxconn’s Ohio EV Plant to Support Stargate AI Infrastructure Project

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SoftBank Group Corp (9984.T) is purchasing Foxconn Technology Group’s (2317.TW) electric vehicle manufacturing plant in Ohio to further its ambitious Stargate project aimed at building extensive AI data center infrastructure across the United States, Bloomberg News reported on Friday. The Stargate initiative, unveiled by U.S. President Donald Trump in January, represents a private sector investment potentially reaching $500 billion, with backing from SoftBank, OpenAI, and Oracle (ORCL.N).

SoftBank reportedly faced challenges in its financial planning for Stargate and sought Foxconn’s involvement to facilitate the development of data centers and related infrastructure, leading to the acquisition. The Ohio facility is expected to be repurposed as a data center site. Reuters could not independently confirm the report; SoftBank declined to comment, and Foxconn did not immediately respond.

The Stargate Project aims to generate over 100,000 jobs across the U.S., aligning with national goals to boost AI infrastructure and domestic technological capacity.

Apollo Acquires Majority Stake in Stream Data Centers to Capitalize on AI-Driven Infrastructure Growth

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Apollo has agreed to buy a majority interest in Stream Data Centers (SDC) as part of a strategic bet on the booming demand for digital infrastructure driven by artificial intelligence and cloud computing. Data centers, critical hubs housing computing hardware, are expected to see global spending of up to $6.7 trillion by 2030, according to McKinsey.

Stream Data Centers specializes in building, leasing, and managing large-scale data center campuses. It has completed over 20 projects and has an extensive pipeline with multi-gigawatt capacity. Apollo aims to scale SDC to become a key partner for major hyperscalers like Amazon, Microsoft, and Google, who increasingly rely on third-party developers for land acquisition, regulatory approvals, and power sourcing for their data centers.

Apollo partner Trevor Mills emphasized the ongoing and diverse demand from hyperscalers requiring collaboration with external developers. This investment aligns with rising capital expenditures by tech giants — Meta recently raised its annual spending forecast by $2 billion to as much as $72 billion, Microsoft plans over $30 billion in its fiscal first quarter, and Alphabet increased its 2024 capex target to $85 billion, with further rises expected to meet AI demands.

While financial terms were not disclosed, Apollo’s president Jim Zelter highlighted that data centers will need $1.5 trillion in external financing by 2030, with private credit accounting for $800 billion — a space where Apollo leads. The International Energy Agency forecasts electricity demand for data centers will more than double by then, surpassing Japan’s current total consumption.

Other major asset managers like Blackstone, KKR, and BlackRock have also committed billions to data center investments, underscoring the sector’s growing importance. Stream Data Centers’ management will retain a minority stake and continue running operations post-deal.