CoreWeave Posts $2.58B Revenue on Meta Deal
CoreWeave reported $2.58 billion in Q2 revenue, driven by a massive contract with Meta, while carrying a heavy debt load.
Key points
- CoreWeave reported $2.58 billion in Q2 revenue, a 112% year-over-year increase driven largely by a $21 billion contract with Meta.
- CoreWeave's contracted backlog stands at $104 billion, with an additional $25 billion added in early Q3, significantly outpacing rival Nebius.
- Rothschild Redburn downgraded both CoreWeave and Nebius to Sell, citing high debt levels and heavy capital expenditure plans as key risks.
CoreWeave has reported a significant surge in earnings, posting approximately $2.58 billion in revenue for the second quarter of fiscal 2026. This figure represents a 112% increase compared to the same period last year, cementing the company's position as the largest player in the specialized AI cloud infrastructure market.
The primary driver of this growth is a massive agreement with Meta, valued at up to $21 billion. As noted by The Cryptonomist, this single contract anchors a broader backlog that now stands at $104 billion, giving CoreWeave a financial runway that far exceeds its smaller competitors.
Scale advantages define the market leader
CoreWeave’s revenue is currently about 4.5 times larger than that of its closest rival, Nebius. While both companies are expanding rapidly, CoreWeave’s advantage lies in the sheer volume of committed work. The company has added another $25 billion in new agreements during the early part of the third quarter, further widening the gap in contracted revenue.
This financial scale is mirrored in physical infrastructure. CoreWeave currently operates 1.5 gigawatts of active power capacity, but it has already secured contracts for an additional 3.7 gigawatts. This indicates that demand is significantly outpacing the current physical ability to deliver compute power, creating a backlog of unmet demand.
Rival growth relies on different funding
Nebius is growing at a faster percentage rate, with year-over-year growth exceeding 450%. However, its absolute revenue of roughly $580 million is much smaller. To fund its expansion, Nebius is relying heavily on upfront payments from customers, including a major deal with Microsoft worth between $17.4 billion and $19.4 billion.
Unlike CoreWeave, which is leveraging debt to build its infrastructure, Nebius expects to collect over $9 billion in customer prepayments in 2026. This approach reduces immediate financial risk but ties the company’s growth trajectory closely to the continued willingness of large clients to pay in advance.
Debt burden limits investor confidence
The aggressive expansion of both companies comes with significant financial risks. CoreWeave carries an estimated $33 billion to $35 billion in debt and plans to spend another $30 billion to $35 billion on capital expenditures in 2026. This heavy reliance on borrowing to fund growth has raised concerns among analysts.
Reflecting these concerns, Rothschild Redburn recently downgraded both CoreWeave and Nebius to Sell. The firm set price targets of $54 for CoreWeave and $84 for Nebius, suggesting that the current market valuations do not adequately account for the risks associated with their capital-intensive business models.
