One of the biggest questions among investors these days is what the future holds for artificial intelligence (AI). After several years of rapid adoption and impressive stock price gains, some investors have taken a step back, looking for insight into what comes next.
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One area of interest is neocloud operators, a nascent segment of cloud computing that stockpiles graphics processing units (GPUs) and other infrastructure to provide users with the computational horsepower needed for AI without all the bells and whistles -- often called GPU-as-a-service (GPUaaS).
CoreWeave (NASDAQ:CRWV) and Nebius Group (NASDAQ:NBIS) are the standard-bearers for the movement and, as such, have captured the attention of investors as bellwethers of the adoption of AI. CoreWeave reported its quarterly results after the market close on Tuesday, and Nebius Group was close on its heels on Wednesday. To say the results caught investors off guard might be an understatement.
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Weaving together an impressive quarter
CoreWeave holds the title as the world's largest and most dominant neocloud provider, and the company's second-quarter results help illustrate why. Revenue of $2.58 billion more than doubled, up 112% year over year. CoreWeave continues to invest heavily in the infrastructure needed to increase its compute capacity, which weighed on its bottom line. As a result, its per-share loss widened to $1.14, up from $0.60 in the prior-year quarter.
To give those numbers context, analysts' consensus estimates called for revenue of $2.56 billion and a loss per share of $1.41, so the company cleared expectations by a comfortable margin.
Founder and CEO Michael Intrator said, "CoreWeave reached an important inflection point this quarter as our scale began to translate into expanding operating leverage."
More telling was the company's growing backlog, which soared 246% year over year to $104.2 billion. That growing book of business translated into a robust forecast.
For the third quarter, CoreWeave outlook calls for revenue in a range of $3.45 billion to $3.6 billion, or revenue growth of 158% at the midpoint of its guidance -- which suggests adoption is accelerating. Management also boosted the company's full-year outlook, forecasting revenue of $12.8 billion at the midpoint of its guidance, up from $12.5 billion issued just three months ago.
