$55 Billion Backlog Cannot Hide CoreWeave's $29 Billion Debt Reality

Core Points - CoreWeave has a significant revenue backlog of $55.6 billion, nearly doubling from the previous quarter, driven by major deals with Meta, OpenAI, and NVIDIA [1] - The company has a total debt of $29 billion and burned $1.59 billion in free cash flow during Q3 while expanding data center capacity [1] - Despite a 134% year-over-year revenue growth, market sentiment has shifted from bullish to neutral, with Reddit sentiment dropping from approximately 61 to 41 [1] Financial Overview - CoreWeave's 2031 bonds yield 11.5%, indicating market concerns regarding the company's ability to service its debt [1] - The company has $29 billion in total liabilities against $3.9 billion in equity, highlighting a significant leverage issue [1] - Analysts maintain a consensus price target of $126 for CoreWeave shares, suggesting a potential upside of about 30% from the current trading price of $95.45 [1] Customer and Market Dynamics - Customer concentration is high, with Meta and OpenAI dominating the revenue base, although no single customer accounts for more than 35% of the backlog [1] - The company added over $25 billion in revenue backlog in Q3, primarily from expanded deals with major clients [1] - Market discussions reflect skepticism about CoreWeave's ability to execute on its promises, particularly regarding backlog conversion into revenue [1] Operational Challenges - CoreWeave's future performance depends on its ability to convert backlog into revenue without facing infrastructure bottlenecks [1] - The company expanded its active power capacity to 590 megawatts in Q3 and has 2.9 gigawatts of contracted capacity, but data center buildouts are susceptible to delays [1] - CEO Michael Intrator acknowledged potential delays from third-party providers, emphasizing the need for timely execution to meet customer expectations [1]