CoreWeave's Upbeat Outlook: Are Expanding Data Centers at the Core?

For the second consecutive quarter, CoreWeave, Inc. (CRWV) has raised its full-year revenue outlook. The company now projects 2025 revenues in the range of $5.15 billion to $5.35 billion, up from the previous guidance of $4.9 billion to $5.1 billion. The upward revision, representing a $250 million increase, reflects continued strength in customer demand. Its rapid expansion of data centers is key to its growth story.

CoreWeave closed the second quarter with 470 megawatts (MW) of active power and increased total contracted power to 2.2 gigawatts (GW), aiming to deliver more than 900 MW of active power by year-end. The company is rapidly expanding its footprint, including a $6 billion data center investment in Lancaster, PA, and a joint venture project in Kenilworth, NJ, to meet rising demand. It has launched RTX PRO 6000 Blackwell GPU instances, offering faster AI performance and cost-efficient scalability. With broad NVIDIA Blackwell support and deep platform optimizations, CRWV solidifies its position as a top AI cloud provider.

Driven by the OpenAI expansion and new wins across enterprises and AI startups, CRWV’s contracted backlog reached $30.1 billion, up $4 billion sequentially and doubling year to date. In addition, the proposed acquisition of Core Scientific is likely to add 1.3 GW of gross power capacity and drive $500 million in annual run-rate cost savings by 2027 through vertical integration.

Per a report by Precedence Research, the global AI infrastructure market is projected to grow from $60.23 billion in 2025 to $499.33 billion by 2034, at a 26.6% CAGR. As more industries embrace AI to drive productivity, innovation and competitiveness, demand for robust infrastructure surges. CRWV continues to ramp up investments in data centers and server infrastructure to keep pace with the ongoing traction in customer demand.

In the last reported quarter, CoreWeave delivered strong results, with revenue soaring 207% to $1.2 billion and adjusted operating income increasing 134% to $200 million. Capital expenditures increased to $2.9 billion, surpassing the previous quarter's total by more than $1 billion, reflecting significant investments in data centers and servers to support growing demand.

Amid a strong demand backdrop, management anticipates third-quarter revenues of $1.26–$1.30 billion and adjusted operating income of $160–$190 million. As capacity expands rapidly, deployment costs are incurred before revenue is realized, leading to a near-term margin impact.

CRWV Faces Fierce AI Infrastructure Competition

Nebius Group N.V. (NBIS) is an emerging pure-play AI infrastructure company. It is rapidly expanding in the AI infrastructure sector, intending to reach 1 GW capacity by 2026. This includes new sites in the U.K., Israel and New Jersey, and expansions in Finland and the United States. Nebius plans to secure 220 MW of connected power (active or ready for GPU deployment), including 100 MW of active power. Favoring greenfield developments for cost efficiency, NBIS increased its 2025 ARR guidance to $900 million–$1.1 billion from $750 million–$1 billion, with ARR already hitting $430 million in June. Supported by $2 billion in 2025 capex and strong liquidity, management views the AI boom as a “once-in-a-generation” growth opportunity.

Microsoft (MSFT) remains a dominant force in technology, leading cloud infrastructure through Azure while rapidly expanding in AI infrastructure. Its partnership with OpenAI has cemented Azure as a premier platform for AI workloads, complemented by AI integration across Office, GitHub and Dynamics. Microsoft has transformed every Azure region into an AI-first environment with liquid cooling, adding more than 2 GW of new data center capacity in the past year and now operating more than 400 data centers across 70 regions. MSFT plans to invest more than $30 billion in capex for first quarter fiscal 2026, up from $24.2 billion in fourth-quarter fiscal 2025.

CRWV Price Performance, Valuation and Estimates

Shares of CoreWeave have gained 130.9% in the past year compared with the Internet Software industry’s growth of 39.1%.

In terms of Price/Book, CRWV shares are trading at 15.93X, way higher than the Internet Software Services industry’s 6.47X.

The Zacks Consensus Estimate for CRWV’s earnings for 2025 has been revised downward over the past 60 days.

CRWV currently carries a Zacks Rank #3 (Hold). You can see see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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