TLDR
- CoreWeave stock jumped 12% on Tuesday after announcing a $14.2 billion cloud computing deal with Meta running through December 2031
- The company has signed three major contracts worth over $42 billion in recent weeks, including deals with Nvidia ($6.3 billion) and OpenAI ($22.4 billion)
- CoreWeave stock has gained 63% over the past three weeks, recovering from a summer decline that saw shares drop 55%
- The company reported 105% revenue growth to $1.21 billion in Q2 but posted a $290.5 million net loss
- CoreWeave specializes in GPU-as-a-service, renting high-performance graphics chips to AI companies without them building their own data centers
CoreWeave stock surged 12% on Tuesday following confirmation of a massive cloud computing contract with Meta Platforms. The deal is worth up to $14.2 billion and runs through December 2031.
The agreement gives Meta access to guaranteed cloud capacity. It also includes an option to extend into 2032.
For CoreWeave, this represents another major win in what has become a breakout month. The stock has now climbed 63% over the past three weeks alone.
The Meta partnership is the latest in a string of blockbuster announcements. CoreWeave secured a $6.3 billion deal with Nvidia earlier this month.
That agreement ensures Nvidia will purchase any unsold cloud capacity through April 2032. This creates a revenue floor for CoreWeave during slower demand periods.
Last week, the company also expanded its existing contract with OpenAI. The new capacity agreement adds $6.5 billion to the relationship.
That brings the total OpenAI contract value to $22.4 billion. The capacity will support training of OpenAI’s next-generation models.
In just a few weeks, CoreWeave has announced contracts totaling more than $42 billion. For a company founded in 2017, the pace of growth has been remarkable.
From Summer Collapse to Fall Rally
The recent gains come after a brutal summer for CoreWeave shareholders. The stock lost over 55% of its value from its late June peak.
Shares hit lows of $84.50 in early September. The recovery has been swift but volatile.
CoreWeave now trades above $142. However, the stock still needs to clear its August high of $150 to confirm a full recovery.
The June high near $186 remains the next technical target. Analysts point to the expanding client roster as the driver behind renewed optimism.
Revenue Growth Comes With Heavy Costs
CoreWeave reported second quarter revenue of $1.21 billion. That represents 105% growth compared to the same period last year.
Major customers include OpenAI, Microsoft, and now Meta. The company’s order backlog sits at $30.1 billion.
But scaling up has been expensive. CoreWeave posted a $290.5 million net loss in Q2.
Capital expenditures hit $2.9 billion during the quarter. The company plans to invest between $20 billion and $23 billion annually in infrastructure.
CoreWeave provides GPU-as-a-service to clients building AI models. The business model involves renting high-performance graphics chips through the cloud.
This allows companies to access computing power without constructing their own data centers. CoreWeave positions itself as infrastructure for the AI boom.
The Nvidia backstop deal provides financial stability during periods of fluctuating client demand. It deepens CoreWeave’s relationship with a key chip supplier.
The Meta contract underscores the steep costs of AI development. Meta will receive access to Nvidia’s latest GB300 systems under the agreement.
Meta has not publicly commented on the partnership. The deal runs through December 2031 with extension options.
CoreWeave stock remains one of the more volatile names in the AI infrastructure space. Traders have embraced the growth story despite the bumpy ride.
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