CoreWeave experienced a significant decline in its stock value, closing down 16% on Tuesday following comments made by CEO Mike Intrator regarding delays from a third-party data center developer. This setback has impacted the company’s full-year guidance as outlined in its latest earnings report.
During an interview on CNBC’s “Squawk on the Street,” Intrator explained that while the quarter met expectations across the board, one particular delay was problematic. He specified that the issue arose with a “singular data center provider,” which he emphasized could be mistaken as a single location, but involves multiple sites associated with the company.
Jim Cramer, a CNBC host, pointed out that the delays are related to facilities in Texas, Oklahoma, and North Carolina. There has been speculation that these locations are tied to Core Scientific, a firm that CoreWeave attempted to acquire for $9 billion earlier this year, a deal that Core Scientific shareholders ultimately rejected. Core Scientific’s shares fell by 10% on the same day.
During the earnings call, a question was raised by Mark Murphy, an analyst from JPMorgan Securities, regarding whether the delays were linked to Core Scientific; however, Intrator refrained from naming the company. He did mention that there was an issue at one specific data center affecting operations, while reassuring stakeholders that CoreWeave maintains a diverse portfolio of 41 data centers.
While setbacks like these can be concerning for investors, the company’s leadership remains focused on overcoming these challenges and fulfilling its operational goals. The ongoing collaboration between CoreWeave and various data center providers highlights their commitment to establishing a robust infrastructure.