Can CoreWeave Maintain More Than 60% EBITDA Margins Amid Rising CapEx?

Core Insights - CoreWeave, Inc. (CRWV) reported a third-quarter 2025 adjusted EBITDA of $838.1 million, significantly up from $378.8 million in the same quarter last year, with EBITDA margins exceeding 60% [1][9] - The company benefits from long-term customer agreements and a specialized infrastructure model optimized for AI workloads, allowing for higher returns per deployed GPU compared to traditional cloud providers [2][9] - CoreWeave's capital expenditures are projected to be between $12 billion and $14 billion for 2025, a reduction from earlier estimates, with expectations for 2026 expenditures to more than double 2025 levels [6] Growth Drivers - Demand from AI labs, enterprise customers, and hyperscale partners remains strong, driven by a shortage of high-performance compute capacity [5] - CoreWeave has secured significant multi-year agreements, including contracts worth up to $14.2 billion with Meta and $22.4 billion with OpenAI, marking its transition to a global AI infrastructure leader [5] - The company’s backlog and remaining performance obligations provide strong visibility into future revenue and profitability [4] Competitive Landscape - Nebius Group N.V. (NBIS) is also focused on AI infrastructure, recently announcing a $3 billion agreement with Meta, with revenue expected to ramp up in 2026 [7] - Microsoft Corporation (MSFT) plans to increase its AI capacity by over 80% in 2025 and is investing heavily in data centers, including the launch of the world's most powerful AI data center [8][10] Market Performance - CoreWeave's shares have increased by 88% over the past year, outperforming the Internet Software industry's growth of 9.6% [11] - The company's shares are trading at a Price/Book ratio of 9.44X, significantly higher than the industry average of 6.07X [12] - The Zacks Consensus Estimate for CoreWeave's earnings for 2025 has been revised upward over the past 60 days [13]