CoreWeave Surges 19% as AI Cloud Demand Drives Record Backlog and Raised Guidance

CoreWeave (CRWV) shares surged about 19% after the AI cloud provider reported second-quarter revenue of $2.58 billion, up 112% year over year, and raised its full-year guidance. The company also disclosed a record backlog of $104 billion, a 246% increase from a year earlier, and said it secured more than $25 billion in new commitments during the third quarter.

The results validate that demand for AI compute remains strong, even as concerns about oversupply and customer concentration have weighed on the sector. CoreWeave, which went public in March, is the largest pure-play AI cloud provider, renting out Nvidia GPUs to companies like Microsoft and OpenAI.

Backlog and Guidance

CoreWeave's backlog, which represents contracted future revenue, grew to $104 billion as of June 30, up from $30 billion a year earlier. The company said it added more than $25 billion in new commitments in the third quarter, indicating that demand is not slowing. The backlog includes contracts with durations of up to several years, providing visibility into future revenue.

The company raised its full-year revenue guidance to between $10.5 billion and $10.8 billion, up from a previous range of $9.8 billion to $10.1 billion. It also raised its operating income guidance, signaling that margins are improving as utilization rates rise and the company scales its data center fleet.

Margin Expansion

CoreWeave's adjusted EBITDA margin expanded to 45% in the second quarter, up from 38% a year earlier. The company said it is benefiting from better pricing on long-term contracts and improved operational efficiency. Analysts noted that AI demand is now boosting margins, not just revenue, a key shift for a company that has been criticized for its heavy capital expenditures.

"The margin expansion is the real story here," said a note from JPMorgan, which raised its price target to $120 from $110. "CoreWeave is proving it can convert its massive backlog into profitable growth."

Analyst Reactions

Wall Street responded positively to the results. Truist Securities raised its price target to $155 from $126, while Piper Sandler increased its target to $153 from $151. Cantor Fitzgerald raised its target to $176, and Rosenblatt maintained a price target of $250, the highest on the Street.

However, not all analysts are convinced. Bernstein maintained its Underperform rating, raising its price target to $74 from $67, citing concerns about customer concentration and the sustainability of demand. Mizuho kept a Neutral rating with a $115 target, and JPMorgan also maintained Neutral.

CapEx and Balance Sheet

CoreWeave's capital expenditures remain elevated, reflecting its aggressive buildout of data centers. The company spent $3.4 billion on property and equipment in the first half of 2025, and its accumulated depreciation reached $3.38 billion by the end of 2025. Accounts payable jumped to $1.62 billion at the end of 2025, up from $868 million a year earlier, reflecting the scale of its purchases.

The company's balance sheet shows total liabilities of $5.77 billion in accrued liabilities as of the end of 2025, up from $356 million a year earlier. This increase is partly due to the timing of payments for GPU purchases and data center construction.

Risks and Counterview

Despite the strong quarter, risks remain. CoreWeave's customer base is concentrated, with a few large customers accounting for a significant portion of revenue. If one of these customers reduces its spending, it could have a material impact. Additionally, the company faces competition from hyperscalers like Amazon, Microsoft, and Google, which are also building out AI cloud capacity.

Martin Shkreli, the former pharmaceutical executive, has publicly shorted the stock, arguing that CoreWeave's debt levels are too high and that demand is not sustainable. However, Wall Street remains largely bullish, with most analysts maintaining Buy or Overweight ratings.

What's Next

Investors will be watching CoreWeave's third-quarter results, which are expected in November. The company's ability to continue adding to its backlog and convert it into revenue will be key. With the AI infrastructure boom showing no signs of slowing, CoreWeave is positioned to benefit, but execution and balance sheet management will be critical.