On September 17, CoreWeave (NASDAQ:CRWV) said it has kept signing customers at higher prices since June 30. Its third quarter contracts run just three to six months, yet they price out around $40 million of annualized revenue per megawatt of power. That is a striking number for an AI cloud that is still losing money. The real question is whether pricing like that can eventually outrun the cost of building it all.
Demand Is Doing the Talking
Start with price. CoreWeave describes the deals signed since June 30 as coming at higher rates, and $40 million of yearly revenue for every megawatt shows how much customers will pay to secure capacity. That is what pricing power looks like. Short contracts also mean pricing gets reset often, so the company can capture more if demand stays tight.
Volume backs it up. The revenue backlog was about $104 billion on June 30. That excludes over $25 billion in fresh commitments added early in the third quarter, all money customers have promised to spend. Contracted power tells the same story, rising to about 4.2 gigawatts by the August 11 earnings call from about 3.7 gigawatts on June 30. And the customer base is widening, with enterprises like Caterpillar and Bentley Systems joining AI labs, while second-quarter revenue of $2,575 million more than doubled from $1,212 million a year earlier.
The Price of Racing Ahead
Higher prices have not reached the bottom line yet. Management called the second quarter an inflection point for operating leverage, but operating income slid to a loss of $49 million from a $19 million profit a year earlier. Adjusted operating margin fell to 5% from 16%, so costs are growing faster than revenue even on the adjusted basis. Then comes the debt bill. Net interest expense of $640 million was more than double the prior-year figure, and it helped widen the net loss to $626 million from $290 million.
The backlog is also a promise rather than cash. It counts only if CoreWeave delivers the capacity, and active power stood at 1.5 gigawatts against 3.7 gigawatts contracted on June 30. Building the rest takes capital, and the company raised over $10 billion from convertible bonds and unsecured debt in the second quarter. The three-to-six-month contracts add one more test, because that $40 million rate has to survive every renewal.
Smart Money Meets Skeptics
Hedge fund ownership of CoreWeave rose to 71 funds from 63 in the prior quarter, so more professional money is climbing aboard. Yet 17.84% of the float is sold short, which signals heavy skepticism even as funds pile in. That crowding cuts both ways, since a heavily shorted stock can jump if good news keeps coming. Some of that short interest is just hedging, so it is not all pessimism.
Can Prices Outrun Costs?
CoreWeave’s September 17 update says customers are paying more for its capacity, and that is hard to ignore. What it does not show is whether higher prices can catch up with the interest bill and the build-out still ahead. Bulls need each short renewal to hold its price while new capacity comes online. Bears are waiting for delivery to slip or pricing to soften, since either would hit a company already in the red.
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