Can CoreWeave Convert Its $55B Backlog Into Profitable Growth?

Core Insights - CoreWeave, Inc. (CRWV) is experiencing significant growth in its revenue backlog, driven by strong demand for its AI-focused cloud platform in a supply-constrained environment [1][2] - The company has secured long-term, take-or-pay contracts, enhancing revenue visibility and customer commitment [1][2] Revenue Backlog Growth - As of the last reported quarter, CRWV's revenue backlog reached $55.6 billion, nearly doubling sequentially, with over $25 billion added in the third quarter alone [2][9] - Major contracts with clients such as OpenAI and Meta contributed to this growth, reflecting large-scale contract execution [2][9] - CRWV achieved $50 billion in remaining performance obligations (RPO) faster than any cloud provider in history, indicating strong customer confidence [2] Backlog Quality and Customer Diversification - The quality of the backlog has improved, with no single customer accounting for more than approximately 35% of total backlog, down from about 85% at the beginning of the year [3] - Over 60% of the backlog is tied to investment-grade customers, reinforcing the durability and credit quality of contracted demand [3] Capacity Expansion Strategy - CoreWeave's backlog growth is linked to its aggressive capacity expansion strategy, increasing its active power footprint to approximately 590 megawatts and contracted power capacity to 2.9 gigawatts [4] - More than 1 gigawatt of additional capacity is expected to come online in the next 12 to 24 months, positioning the company to convert backlog into revenue [4] Impact of Third-Party Delays - Despite temporary delays from a third-party data center provider, CoreWeave maintains that these issues do not affect the total value of customer contracts, with adjusted delivery schedules agreed upon by affected customers [5] Future Capital Expenditure - Driven by strong backlog growth, CoreWeave anticipates that its capital expenditure for 2026 will be more than double that of 2025, supporting continued hypergrowth and competitive advantages [6] Competitor Backlogs - Amazon's AWS backlog reached $200 billion, reflecting strong long-term customer commitments and accelerating demand for its infrastructure [7] - Microsoft's backlog reached approximately $392 billion, a 51% year-over-year increase, driven by demand for its cloud and AI services [8]