Will CoreWeave's Heavy Debt Load Disrupt Its Growth Momentum?

Core Insights - CoreWeave, Inc. (CRWV) reported a 134% year-over-year revenue increase to $1.4 billion in Q3 2025, exceeding management's guidance and Zacks Consensus Estimate by 6.8% [1][8] - The company raised $14 billion in debt and equity year-to-date to fund the rapid expansion of its GPU-based data centers, crucial for meeting rising AI compute demand [2][8] - Despite revenue growth, CRWV faces financial strain due to rising interest expenses, which surged to $311 million in Q3 compared to $104 million a year ago, with projections for 2025 interest expenses between $1.21 billion and $1.25 billion [3][8] Financial Performance - CRWV's adjusted net loss for Q3 was $41 million, contrasting with breakeven adjusted net income from the previous year [3] - The company's shares have declined by 36.3% over the past month, while the Internet Software industry has seen a decline of 6.8% [9] Capital Structure and Strategy - Management is working to strengthen the capital structure and lower the cost of capital by amending the DDTL 2.0 Facility, increasing drawable capacity by over $400 million [4] - The company is targeting over 850 MW of active power by year-end, positioning itself as a leading provider for large-scale AI workloads [2] Competitive Landscape - Competitors like Nebius (NBIS) and Microsoft (MSFT) are also expanding aggressively, with Nebius reporting a 355% revenue increase in Q3 and plans for significant capacity growth [5][7] - Microsoft plans to increase its AI capacity by over 80% this fiscal year and has substantial financial resources, including $102 billion in cash and equivalents [8]