CoreWeave's 2026 CapEx Spend to Double: High Risk or High Reward?

As CoreWeave, Inc. CRWV expands at a breakneck speed, it also reflects dramatically accelerated investments to keep up with AI demand. Management now expects 2026 capital expenditures to be in excess of double that of 2025, reflecting continued efforts to scale infrastructure amid supply bottlenecks in the AI cloud market.

For 2025, capex is estimated to be $12 billion to $14 billion compared with $20 billion to $23 billion projected earlier. It expects to recognize the vast amount of capex for the fourth quarter in the first quarter of 2026, following the delay of powered-shell capacity, contributing to the step-up in spending in 2026.

The rationale behind this frenzied investment pace is clear. Demand remains broad-based across GPU generations, supporting aggressive infrastructure expansion. CoreWeave exited the third quarter with $55.6 billion in revenue backlog and 2.9 gigawatts (“GW”) of contracted power capacity. It has more than 1 GW of contracted capacity, which is expected to come online within the next 12-24 months. With 1 GW of contracted capacity still unsold, CoreWeave is well-placed to capture future demand.

CoreWeave Inc. Price, Consensus and EPS Surprise

CoreWeave Inc. price-consensus-eps-surprise-chart | CoreWeave Inc. Quote

However, such aggressive scaling is not without friction. Management noted that it is bringing large deployments online in the fourth quarter, which will pressure near-term adjusted operating margins due to the lag between incurring data center costs and recognizing revenues.

Rising interest expense adds financial strain. Interest expense surged to $311 million compared with $104 million a year ago. For 2025, it expects interest expenses to be between $1.21 billion and $1.25 billion, owing to high leverage. Higher interest expenses can exert pressure on the adjusted net income and potentially affect free cash flow generation and undermine near-term profitability.

Management is working to mitigate financing risk by strengthening capital structure and lowering the cost of capital.

Whether this aggressive capex spend proves to be a growth driver or a massive risk will depend on CoreWeave’s execution, which does not look easy. Challenges for CRWV remain plenty amid intense competition from rivals like pure-play Nebius NBIS and tech behemoths like Microsoft, Amazon AMZN and others, which are also aggressively ramping up capacity.

Capex Plans for Other Players in the AI Infra Space

Amazon’s capex spending is enormous. The company expects 2025 cash capex of $125 billion, with spending expected to increase further in 2026. It reported cash capex of $34.2 billion in the third quarter of 2025, bringing year-to-date spending to $89.9 billion.

The spend is tied mainly to AWS growth (AI and core services), custom silicon (like Trainium) and technology infrastructure supporting North America and International operations. On the earnings call, AMZN noted that it added over 3.8 gigawatts of power over the past 12 months, more than any other cloud provider. It expects to double the overall capacity by 2027. Beyond AWS, Amazon is investing heavily in its fulfillment and transportation network to improve delivery speed and reduce costs.

Nebius is another rapidly growing AI infrastructure company. As it doubles down on AI infrastructure, NBIS has now set an ambitious $5 billion capital expenditure plan for 2025, up from the earlier guidance of $2 billion. Nebius noted that the aggressive capex spend is strategic as this will enable it to secure critical power, land, sites and hardware to support an accelerated build-out of data centers and GPU deployment going forward and capture business opportunities.

Nebius added that securing land and power accounts for only about 1% of the total spending. Building out data centers represents roughly 18-20%, while the final stage, which involves the deployment of GPUs, represents around 80% of the spending.  Even with this capex surge, Nebius has reiterated that it expects to exit 2025 with positive adjusted EBITDA at the group level, though the metric will remain negative for the full year.

CRWV Price Performance, Valuation and Estimates

Shares of CoreWeave have gained 20.9% over the past month as against the Internet Software industry’s decline of 1.1%.

In terms of Price/Book, CRWV’s shares are trading at 8.72X, way higher than the Internet Software industry’s ratio of 5.8X.  

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

CRWV currently carries a Zacks Rank #3 (Hold). You can 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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