CoreWeave plunges 20% on Q1 revenue miss despite quarterly beat
AI infrastructure company's guidance shortfall sparks concerns about GPU cloud demand as capex projections surge to $35 billion
CoreWeave shares tumbled nearly 20% on Friday, marking the steepest single-day decline since the AI infrastructure company went public last March, after its first-quarter revenue forecast fell short of Wall Street expectations.
The stock dropped to $78.18 in afternoon trading, wiping out roughly $9.4 billion in market capitalization and pushing shares below both their 50-day and 200-day moving averages. The sell-off came despite CoreWeave reporting fourth-quarter revenue of $1.57 billion, which topped analyst estimates of $1.53 billion.
The guidance miss overshadowed a quarterly beat and robust annual growth projections, as investors focused on mounting concerns about execution challenges and potential saturation in GPU cloud demand. CoreWeave said it expects Q1 2026 revenue of $1.9 billion to $2.0 billion, well below analyst expectations ranging from $2.24 billion to $2.29 billion.
"CoreWeave's investment cycle is more pronounced than expected," JPMorgan analysts wrote in a research note, cutting their price target to $90 from $110 while maintaining a Neutral rating. The bank joined Mizuho, which trimmed its target to $95 from $100, in expressing caution about the company's spending trajectory.
Investor concerns were compounded by CoreWeave's projection that capital expenditures will surge to $30 billion to $35 billion in 2026, more than doubling the $14.9 billion spent in 2025. The substantial increase comes as the company reported a wider-than-expected Q4 loss of $0.56 per share, compared to the anticipated loss of $0.49.
CFO Nitin Agrawal sought to reassure investors on the earnings call, explaining that the elevated capital spending is tied to already signed customer contracts. "We incur data center lease costs as new capacity comes online, with customer revenue ramping up in subsequent months," Agrawal said, according to reported transcript details.
The contrasting investor reactions highlight growing skepticism about whether AI infrastructure spending can sustain its breakneck pace. CoreWeave's revenue backlog grew more than 400% sequentially to $66.8 billion, including a new $5 billion contract from Meta Platforms. For the full year 2026, management guided to revenue of $12 billion to $13 billion, representing 140% growth at the midpoint.
Not all analysts abandoned the stock. DA Davidson analyst Alexander Platt maintained a Buy rating and raised his price target to $125 from $110, citing "continued strong demand for AI compute." Cantor Fitzgerald's Thomas Blakey reaffirmed an Overweight rating with a $131 target. However, Needham's Mike Cikos reiterated a Hold rating, reflecting the more cautious sentiment that dominated Friday's trading.
The stock's volatility reflects broader uncertainty in the AI infrastructure sector, where valuations have soared on expectations of sustained exponential growth. CoreWeave's 52-week high of $187 stands in sharp contrast to Friday's decline toward $80, underscoring the market's reassessment of growth-at-any-cost strategies in the face of rising capital requirements and competition from deep-pocketed tech giants.
With 30 analysts covering the stock, the consensus target price remains elevated at $126.37, according to market data. The breakdown shows 18 Buy ratings, 11 Holds, and just one Sell, suggesting that while Friday's guidance miss dented confidence, many on Wall Street still view CoreWeave as a long-term beneficiary of the AI buildout.
The question now is whether the Q1 revenue shortfall represents a temporary timing mismatch or signals emerging challenges in converting massive contract backlogs into near-term revenue growth. CoreWeave's ability to demonstrate improved execution in the coming quarters will be critical to determining whether Friday's 20% decline marks a buying opportunity or the beginning of a broader re-rating of AI infrastructure stocks.