AI cloud infrastructure provider CoreWeave experienced a week of extreme volatility, with its stock (CRWV) plunging 28% following a disappointing earnings report before rebounding on news of a major new partnership.
The sell-off began after CoreWeave reported Q4 2025 results on February 26. While Q4 revenue of $1.57 billion beat estimates and represented 110% year-over-year growth, investors focused on weak forward guidance. Management projected Q1 2026 revenue between $1.9 billion and $2.0 billion, significantly missing Wall Street's consensus estimate of $2.29 billion. For the full fiscal year 2026, revenue guidance of $12–$13 billion was slightly above the $12 billion estimate.
The financial details rattled the market. Q4 net losses ballooned to $284 million, up sharply from $36 million a year prior, resulting in a loss per share of $0.89 versus an expected $0.21 loss. Interest expenses also surged to $388 million. Furthermore, the company raised its capital expenditure (CapEx) guidance for FY26 to $30–$35 billion, more than double the $14.9 billion spent in FY25.
CEO Mike Intrator defended the aggressive spending, linking it directly to the company's soaring backlog, which grew from $55.6 billion to $66.8 billion—a 342% year-over-year increase. He stated that 70% of this backlog involves financially stable customers and that every new capacity contract is expected to generate revenue by the end of 2026. CoreWeave's major clients include Meta and Microsoft.
In response, Citi Research slashed its price target on CRWV to $126 from $135 and drastically cut its FY26 earnings per share (EPS) estimate to a loss of $2.97 from a projected profit of $0.75.
The narrative shifted on March 4, when CoreWeave announced a multi-year strategic partnership with AI search company Perplexity. The deal sent CRWV stock up over 4% in premarket trading. Perplexity will run its next-generation AI inference workloads on CoreWeave's cloud platform using dedicated NVIDIA GB200 NVL72-powered clusters, supporting its Sonar and Search API ecosystem.
CEO Mike Intrator highlighted the partnership as part of a strategy to diversify CoreWeave's customer base beyond its largest clients. In a reciprocal move, CoreWeave will deploy Perplexity's Enterprise Max platform internally for its employees.
