CoreWeave CEO defends spending plans as stock plummets 18%

core weaving CEO Mike Intrator backed the company’s massive spending plans in an interview with CNBC’s “Squawk on the Street” on Friday; Shares fell after earnings due to profitability concerns.

Intrator told CNBC that Coreweave willingly chose to invest in more infrastructure and take a margin hit to meet the “once-in-a-generation” need for capacity demand.

“I understand people’s concern when they see us dedicating a large amount of money to this market, but the reality is that our backlog is huge,” he said.

Coreweave’s shares fall 18% on disappointing revenue guidance. The New Jersey-based company also said it plans to spend between $30 billion and $35 billion in 2026. That beat FactSet’s $26.9 billion forecast and raised profitability concerns.

Concerns about the long-term sustainability of Coreweave’s debt load and business model have grown recently.

Company relies on debt to finance advanced AI purchases Nvidia chips which he later rented out. Most of its revenue relies heavily on a small group of hyperscalers and AI companies. Microsoft and OpenAI.

Asked whether problems in the credit market would lead to higher capital costs, Intrator said it expects costs to continue to fall.

“This narrative is out there, but the data does not support it in any way, shape or form,” he said. “Our cost of capital has dropped 300 basis points in the last 12 months.”

Calculated based on the company’s debt load, Intrator said this 300 basis points corresponds to savings of $700 million, and costs have fallen by 600 basis points in the last two years.

Wall Street analysts are bracing for a volatile road ahead as CoreWeave’s massive infrastructure ramp pressures margins and increases costs.

Analysts at Barclays expect shares to remain near those levels as investors gauge spending changes.

“If we encounter increased economic volatility, CRWV shares would likely be disproportionately harmed by its risk-averse positioning,” analysts at JPMorgan wrote.