CoreWeave soars more than 24% for best day since April 2025 after strong Q3 report

CoreWeave shares jumped 24.71% Wednesday for its best day since April 2025 after the neocloud posted quarterly earnings that beat estimates and raised its guidance for the year.

"Demand for the infrastructure is and remains overwhelming." CEO Michael Intrator told CNBC's "Squawk on the Street" Wednesday.

"I think I said that we are 10x oversubscribed to the existing capacity that we have left in 2027, and we are multiples ... oversubscribed on the capacity we have out in 2028," he said.

Neoclouds such as CoreWeave, Nebius and IREN have come under scrutiny this month as investors assessed the sustainability of the AI trade. CoreWeave, in particular, sparked alarm when spreads on its CDS widened past 11%, generally viewed as a distress level, as investors have to pay up for protection against default.

With the price of its high-yield debt climbing, CoreWeave highlighted additional routes to finance its data center build-out with less alarming yields, quelling investor concerns for the time being.

"Our asset level debt has basically been rock solid through this entire thing," Intrator told CNBC. "There is an enormous demand for that product. We're about to launch another asset-level debt in the next week or two that has already been rated high investment grade."

Intrator added that he expects it "will be underwritten in the market at 7% to 7.5% interest," which will bring down the average weighted cost of capital for the company.

The three months to Sept. 30 marked a "breakout quarter" for CoreWeave, Intrator said on the conference call, adding that growth was supported by multiple sources of funding, including financing backed by customer contracts and around $9 billion in customer prepayments and deposits.

Revenue jumped 168% to $3.7 billion in the third quarter, the company said in a Tuesday statement.

Other neclouds also rose on CoreWeave's strong results, with Nebius rising over 15.44%, Applied Digital up 7.37% and Iren up 5.63% Wednesday.

Despite fears that a "blue wave" in last week's midterm elections could restrict data center capacity, Intrator reiterated that data center growth looks poised to continue as expected for CoreWeave.

"We don't see any impact on our ability to deliver the data centers within the U.S. that are required for us to deliver on our backlog," Intrator told CNBC on Wednesday. "In Texas, Governor-elect [Gina Hinojosa], said that facilities that are permitted and under construction will continue, and we've been really, really thoughtful about the broad distribution."

CoreWeave expects $1.275 billion to $1.375 billion in adjusted operating income on $13 billion to $13.3 billion in revenue. Analysts surveyed by Visible Alpha were looking for $1.07 billion in adjusted operating income, and analysts polled by LSEG had expected $12.86 billion in 2026 revenue.

The neocloud has done well to allay concerns about financing by moving away from unsecured bond financing, Zacks Chief Equity Strategist John Blank told CNBC's "Squawk Box Europe."

"It might be the bottom for CoreWeave," Blank said Wednesday. "But the shares are so beaten up, you have to believe at this point there's more value on the upside than the down."