CoreWeave Cuts Q2 Revenue Forecast, Shares Plunge 12% as Capex Soars
CoreWeave shares dropped 12% after management cut its fiscal Q2 revenue growth forecast to 35% from 60%, despite achieving 92% GPU utilization on AI workloads. Quarterly capital expenditures rose to $110 million, up 75% year-over-year, driving free cash flow into a $30 million deficit.
1. Outlook Revision
Management lowered its fiscal Q2 revenue growth forecast from 60% to 35%, signaling a slowdown in sales momentum despite continued AI demand.
2. AI Workload Utilization
The company reported that GPU cluster utilization for AI customers reached 92%, reflecting strong adoption of its capacity even as growth projections were tempered.
3. Rising Capital Expenditures
Quarterly capital spending climbed to $110 million, a 75% increase year-over-year, which pushed free cash flow into a negative $30 million position.
4. Market Reaction
Shares fell 12% on the day of the update as investors weighed the cut in growth guidance against ongoing margin pressure from rising build-out costs.