TLDR
- CoreWeave (CRWV) stock jumped 17% after Oracle released massive cloud infrastructure growth guidance
- Oracle expects its cloud business to grow 77% to $18 billion this year, then reach $144 billion by 2029
- OpenAI signed a five-year contract with Oracle worth up to $300 billion for data center services
- CoreWeave launched CoreWeave Ventures to support AI tech growth, boosting shares 8%
- The company reported $1.9 billion in revenue and announced a $4 billion collaboration expansion with OpenAI
CoreWeave stock climbed 17% on Wednesday as Oracle’s explosive cloud infrastructure guidance sent ripples through the AI sector. The jump came after Oracle painted a picture of massive growth ahead for cloud services.
Oracle expects its cloud infrastructure business to expand 77% this year to $18 billion. The tech giant then forecasts jumps to $32 billion, $73 billion, $114 billion, and $144 billion over the next four fiscal years.
This guidance boost comes at a time when CoreWeave is making its own moves in the AI space. The company recently launched CoreWeave Ventures, pushing shares up another 8% as investors cheered the AI-focused initiative.
The timing couldn’t be better for CoreWeave. Oracle’s bullish outlook validates the entire cloud infrastructure market where CoreWeave operates as a specialist provider.
Adding fuel to the fire, reports surfaced that OpenAI signed a five-year contract with Oracle worth up to $300 billion for data center services. This massive deal shows just how much money is flowing into AI infrastructure.
Revenue Growth Tells the Story
CoreWeave has been riding the AI wave hard. The company reported revenue of $1.9 billion, driven by escalating demand for its AI-cloud platform.
The growth numbers are eye-popping. Since its IPO, CoreWeave stock has jumped 150% thanks to 300% year-over-year sales growth.
The company also announced a $4 billion collaboration expansion with OpenAI. This partnership reinforces CoreWeave’s position as a key player in the AI infrastructure game.
Gross profit hit $900 million, showing the company can make money from its operations. However, the picture isn’t all rosy – CoreWeave is still losing money at the operating level.
Partnerships Drive Growth
CoreWeave has been building strong partnerships with tech giants like NVIDIA. These relationships act as stepping stones for the company’s aggressive expansion plans.
The company’s contracted backlogs have doubled, showing growing adoption of CoreWeave’s solutions across multiple sectors. This backlog growth provides some visibility into future revenue.
Revenue per share sits at $5.17, holding market interest but with some caution from investors. The stock trades at roughly 10.8 times this year’s expected sales.
Despite Wednesday’s rally, CoreWeave shares still trade about 37% below their all-time high of $187. Some of this pullback came from investor disappointment over recent acquisition moves.
The company carries a heavy debt load with total liabilities at $22.42 billion. This debt overhang creates some concern among traditional value investors.
EBIT margin sits in negative territory at 3%, while EBITDA margin looks healthier at 35.6%. The company invested heavily with capital expenditures around $2.4 billion.
Net cash from operating activities is working to balance out these headwinds. The company is in that classic growth phase where it’s spending big to capture market share.
CoreWeave announced its collaboration expansion with OpenAI is now worth $4 billion, up from previous agreements.
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