Will CoreWeave's Heavy Debt Load Disrupt Its Growth Momentum? (finance.yahoo.com)

CoreWeave blew past expectations in Q3 2025, reporting $1.4B in revenue (up 134% YoY) as it accelerated deployment of GPU-based data centers—adding eight U.S. sites and expanding in Europe—to meet surging AI training and inference demand. At quarter-end it had ~590 MW of active power and 2.9 GW contracted, targeting >850 MW of active power by year-end, positioning itself as a top-tier provider for large-scale models. Management said it raised roughly $14B in debt and equity year-to-date to fund rapid capacity buildout, underlining how crucial third-party hyperscale GPU capacity has become to the AI/ML ecosystem. That growth comes with material financial risk. Interest expense jumped to $311M in Q3 (vs. $104M a year ago) and CoreWeave expects $1.21–1.25B of interest for 2025, contributing to a $41M adjusted net loss in the quarter and heavy capex (2026 capex guided to more than double 2025). Management is trimming borrowing costs (a new $3B tranche at SOFR+4.25%), but whether leverage accelerates scale or undermines cash flow hinges on execution amid fierce competition from Nebius (rapid MW targets and asset-backed financing) and Microsoft (massive cash reserves and an 80%+ AI capacity boost). Market wariness is visible: CRWV shares are down ~36% over the past month and trade at a rich P/B vs. peers, highlighting execution and financing risk for the AI infrastructure market.