CoreWeave earnings: 5 key details to watch as the stock eyes a turnaround

CoreWeave's upcoming Q3 earnings report is a critical event following a recent stock decline, with analysts projecting a potential rebound driven by substantial growth in remaining performance obligations (RPO). Jefferies and Citi analysts highlight new multi-billion dollar contracts with OpenAI, Meta, and Nvidia, expected to double RPO to $60 billion, alongside increased power capacity. While aggressive capital expenditures for AI infrastructure will likely lead to near-term unprofitability, analysts anticipate robust revenue growth, with Citi forecasting $1.3 billion for Q3, and foresee significant profitability improvements by late 2025/2027 as the company pursues customer diversification.

Analysis

CoreWeave's stock has experienced a significant decline of over 30% since its Q2 earnings report, yet analysts like Jefferies' Brent Thill and Citi's Tyler Radke maintain an optimistic outlook, projecting price targets of $180 and $192 respectively. This positive sentiment is largely driven by strong artificial intelligence momentum and anticipated catalysts from the upcoming Q3 earnings.

A primary driver for this projected rebound is the expected surge in Remaining Performance Obligations (RPO), which analysts anticipate will double from $30 billion to $60 billion. This increase is attributed to new multi-billion dollar contracts with major clients such as OpenAI, Meta Platforms, and Nvidia Corp. Citi forecasts CoreWeave's Q3 revenue to reach $1.3 billion, representing a 124% year-over-year increase and exceeding the Wall Street consensus of $1.21 billion.

Operationally, CoreWeave has addressed a critical bottleneck by securing 2.8 gigawatts of contracted power, an increase of 600 megawatts from Q2. While aggressive capital expenditures for AI infrastructure will likely result in near-term unprofitability, analysts expect a smaller net loss this quarter and significant profitability improvements by late 2025 and into 2027, supported by ongoing customer diversification efforts.

Key Decisions for Investors

• Closely monitor the reported Q3 Remaining Performance Obligations (RPO) and revenue figures, as a significant increase above consensus would validate the strong growth narrative.
• Evaluate the company's capital expenditure plans and management's updated timeline for achieving profitability, considering the current debt load and aggressive infrastructure investments.
• Assess progress on customer diversification and sustained access to power, which are crucial for mitigating concentration risk and enabling long-term operational scaling.