CoreWeave Stock Faces 20.7% Earnings Swing as Texas and Debt Fears Mount

Source Beincrypto

Options traders are pricing a move of about 20.7%, or $9.65, in either direction for CoreWeave (CRWV) stock after the AI cloud company reports earnings on Tuesday, November 10.

That is far wider than the 13.8% and 12.5% swings options priced before earlier reports. Shareholders also hold a stock that has fallen after five of its six earnings reports.

CoreWeave earnings swing range $36.89 to $56.18 CoreWeave earnings expected move by options expiry, Source: options data

Why Is the Market Bracing for Such a Big Move?

CoreWeave rents Nvidia-powered computing capacity to AI developers. Its shares closed Friday at $46.40, up 6.28%, a day after sliding 9.83% to a 52-week low of $40.58. The stock traded as high as $138.25 within the past year.

Thursday’s drop followed the US midterm elections. Texas voters chose Democrat Gina Hinojosa as governor, and she has called for a statewide pause on new AI data center construction, a shift that could hit Texas data center operators.

On Saturday, CoreWeave CEO Michael Intrator wrote to Hinojosa offering to work on finishing already-permitted projects.

“You have made clear that data center growth must work for Texas. We strongly support those principles,” he said.

Borrowing costs weigh on CoreWeave’s debt-funded AI buildout. Yields on CoreWeave’s corporate bonds rose above 17% in early November.

The company expects third-quarter interest costs of $860 million to $940 million, up from $640 million in the second quarter.

What Does Tuesday’s Report Need to Show?

CoreWeave guided third-quarter revenue of $3.45 billion to $3.60 billion. Analysts tracked by Zacks expect a loss of $1.45 per share, against a $0.31 loss a year earlier.

The last report broke the losing pattern. Shares jumped 19% in August after results beat estimates.

Rival Nebius (NBIS) reports Thursday before the open. Its shares surged 34% after its own August results.

Of 29 analysts tracked by TipRanks, 21 rate CoreWeave a Buy and three a Sell, with targets ranging from $39 to $250.

CoreWeave (CRWV) Stock Forecast & Price Target. Source: TipRanksCoreWeave (CRWV) Stock Forecast & Price Target. Source: TipRanks

Tuesday’s call gives management its first chance to address Texas exposure and borrowing costs together. Nebius reports two days later, testing whether investors still pay up for rented AI computing power.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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