CoreWeave (NASDAQ: CRWV) shot up 23% on Wednesday, November 11, and the reason goes beyond another strong earnings report.
For some time, Wall Street had been questioning whether the company could carry out its ambitious AI plans without buckling under the cost of its debt.
Then Tuesday’s financial results arrived, along with fresh assurances of cheaper financing. Suddenly, traders had reason to rethink their bets against the stock.
The company brought in $3.7 billion in the third quarter, up 168% from a year earlier. Earnings also topped market expectations, and management raised its forecasts for 2026.
There’s another notable aspect to the story: CoreWeave apparently has more prospective customers than its equipment can serve. CoreWeave CEO Michael Intrator told reporters:
“Demand for the infrastructure is and remains overwhelming. I think I said that we are 10x oversubscribed to the existing capacity that we have left in 2027, and we are multiples … oversubscribed on the capacity we have out in 2028.”
CoreWeave finds another way to tackle its costly debt problem
This is where things get complicated. An AI cloud computing provider has to invest enormous sums before customers can begin to benefit from its products.
These costs have fueled market concerns about the prospects of neocloud companies, particularly CoreWeave, Nebius (NASDAQ: NBIS), and IREN (NASDAQ: IREN).
The concerns were evident when the cost of insuring CoreWeave’s debt against default climbed above 11%. In credit markets, prices at that level are usually a warning sign.
As its riskier bonds grew more expensive, management began exploring financing secured by specific assets, rather than depending so heavily on unsecured borrowing.
“Our asset level debt has basically been rock solid through this entire thing. There is an enormous demand for that product,” Michael said, adding that another investment-grade financing deal could reach investors within the next couple of weeks.
Interest rates on the new borrowings range from 7% to 7.5%, potentially helping to lower the cost of capital.
CoreWeave has nearly $9 billion in advance payments and deposits from customers. Client contracts also underpin the company’s financing deals.
On Tuesday’s earnings call, Michael described the quarter as a breakthrough for the company.
CoreWeave raises its 2026 outlook as competitors join the rally
CoreWeave now expects full-year revenue of $13 billion to $13.3 billion. Analysts surveyed by LSEG had forecast $12.86 billion.
The company projects adjusted operating income of $1.275 billion to $1.375 billion, versus the $1.07 billion estimate compiled by Visible Alpha.
After the market opened Wednesday, shares of some other AI infrastructure companies also rose amid the excitement. NEBIUS gained 17%, Applied Digital (NASDAQ: APLD) rose 9%, and IREN climbed 8%.
The industry’s plans to build new facilities remain a political issue.
After Democrats’ gains in last week’s midterm elections, some were concerned about how the results might affect future policy decisions concerning U.S. data centers.
Michael dismissed those concerns, saying CoreWeave expects to complete the domestic facilities required to meet its contracted backlog.
He cited Texas Governor-elect Gina Hinojosa, who has indicated that projects already approved and under construction can proceed.
CoreWeave has also distributed its facilities across multiple locations instead of concentrating its entire expansion in one state, limiting its exposure to any single jurisdiction’s regulatory decisions.
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