Nvidia-Backed CoreWeave Shares Slide 9% After Data Center Delay Hits Outlook

Nvidia-backed CoreWeave (CRWV, Financials) shares plummeted nearly 9% in premarket trade Tuesday after lowering its full-year revenue outlook due to data center project delays. The failure illustrates operational challenges for AI infrastructure builders.

One of its key data center partners faced issues, delaying capacity additions. The concerned client extended its contract, preserving the offer value. CoreWeave did not reveal its client, but analysts assume it is a major generative AI business.

LSEG statistics show CoreWeave's third-quarter revenue of $1.36 billion above analyst expectations of $1.29 billion despite timing. Higher infrastructure costs, GPU prices, and AI computing power competition lowered its adjusted operating margin to 16% from 21% a year earlier.

Barclays analysts noted, This quarter exposed the operational risks investors have been wary of, adding that massive AI data centers were showing its first real cracks.

CoreWeave immediately expanded from Ethereum mining to leasing Nvidia GPUs to Meta Platforms and OpenAI. Since its March IPO, the stock has surged 164%, indicating investor interest in AI computing.

MoffettNathanson analysts said the data highlight how tight margins could get when AI demand eventually cools. CoreWeave's long-term contracts and Nvidia support indicate its strength in the fast-changing AI cloud market.