CoreWeave Stock: A $99.4 Billion Backlog Meets a Harsh Reality Check

Despite revenue doubling to $2.1B and a $99.4B order book, CoreWeave faces margin pressure, a net loss of $740M, and a new rival from Alphabet and Blackstone.

The numbers are staggering. A $21 billion multi-year agreement with Meta. A $99.4 billion order book, up 284% year over year. Revenue that more than doubled to $2.1 billion in the first quarter. Yet CoreWeave’s shares are struggling to hold onto gains, as investors begin to weigh those impressive figures against the mounting costs of becoming an AI infrastructure colossus.

Shares of the cloud provider edged up 2.22% to €87.67 on Wednesday, following a surprise downgrade from DA Davidson that slashed the price target from $175 to $100 and dropped the rating from "Buy" to "Neutral." The analyst action signals a fundamental shift in how the market views CoreWeave: less as a pure growth story, more as a capital-intensive operation facing margin pressure and rising competition.

Profitability Questions Cloud the Growth Narrative

CoreWeave’s top-line momentum remains undeniable. First-quarter revenue hit $2.08 billion, a 112% jump from a year ago. But the bottom line tells a different story. The company posted a net loss of $740 million, weighed down by hefty interest expenses and relentless capital outlays required to expand its data center fleet.

Analysts now estimate that CoreWeave’s EBIT margins could hover around just 1% on a projected $8 billion in annual revenue. For a business that needs to spend billions on hardware and facilities, that leaves almost no room for error. The market is increasingly questioning not whether demand exists, but whether CoreWeave can convert its enormous backlog into sustainable profits.

Building for Dominance — At a Price

To service its flood of contracts, CoreWeave is on an unprecedented building spree. The company already surpassed 1 gigawatt of active data center capacity across 49 sites in the U.S. and Europe, and management aims to reach 8 gigawatts by 2030 — an eightfold increase. That ambition requires staggering amounts of capital. CoreWeave has raised over $20 billion this year alone, including a heavily oversubscribed credit facility for high-performance computing equipment.

One key project is a 120-megawatt campus in Virginia, backed by a $750 million financing tranche from Blue Owl, Chirisa Technology Parks, and PowerHouse Data Centers, with CoreWeave as the anchor tenant. Deliveries are expected through 2025 and 2026, adding physical heft to the order book.

A New Competitive Threat Emerges

While CoreWeave’s close partnership with Nvidia — which invested roughly $2 billion in the company earlier this year and named it a preferred partner for inference workloads — remains a strategic moat, a fresh challenge has appeared. Alphabet and Blackstone are joining forces to build a rival AI cloud platform powered by Google’s own Tensor Processing Units (TPUs). Blackstone is committing $5 billion in equity, and with leverage the project could expand to $25 billion, targeting 500 megawatts of capacity by 2027.

That scale, while still modest compared to CoreWeave’s current 1 GW, marks a clear signal: hyperscalers want more control over hardware, pricing, and supply chains. It introduces a potential alternative to Nvidia-based infrastructure and puts pressure on CoreWeave’s pricing power, even as its backlog provides near-term cover.

The Backlog Remains a Bulwark

For now, the sheer size of CoreWeave’s contracted revenue — $99.4 billion — offers a powerful buffer. The Meta deal alone, worth $21 billion over multiple years, adds long-term visibility. Another major agreement with financial services firm Jane Street, which also made a large equity investment, further strengthens the order book.

Yet investors are increasingly pricing in risk. The stock has gained about 29% since the start of the year but has slipped 7.43% over the past week, suggesting that the honeymoon period for CoreWeave’s public listing may be giving way to a more skeptical phase. The market wants to see whether CoreWeave can defend its margins and maintain its competitive edge as the AI landscape shifts from model training to inference — and as rivals armed with deep pockets and proprietary chips enter the fray.