CoreWeave executives offered investors a measure of reassurance on Tuesday: the AI compute provider said it expects to achieve profitability in the first half of 2028.

That reassurance comes not a moment too soon. A month ago, CoreWeave's stock had already shed more than 40% of its value, and market chatter about an AI bubble was growing louder by the day.

By the latest guidance, CoreWeave raised its full-year 2026 revenue forecast from $12.4 billion to a range of $13 billion to $13.3 billion. Revenue in the just-ended third quarter surged to $3.66 billion, up nearly 170% year over year and ahead of the $3.55 billion market consensus. The per-share loss came in at 95 cents, narrower than the $1.16 analysts had expected. On these numbers alone, the growth is indeed explosive.

But the company has never turned a profit. As of the end of September, its total debt on the books stood at about $46.9 billion, up from $35.6 billion at the end of June—more than $10 billion added in just over three months. Third-quarter capital expenditures jumped from $9.4 billion in the prior quarter to $14.5 billion.

Even more striking is the efficiency—or lack thereof. In the second quarter of this year, the company's gross margin was only about 11.77%, and net interest expense alone consumed $640 million. On top of its on-book debt, it also carried about $16.3 billion in operating lease liabilities at the end of June—another layer of leverage kept off the balance sheet. The company is bleeding money while accelerating spending, with no sign of easing off the expansion pedal.

CoreWeave's business is, in essence, that of a compute landlord. It borrows money to buy Nvidia GPUs, builds data centers, and then leases computing power on long-term contracts to major customers such as Microsoft, OpenAI, and Meta. Its customer roster also includes Anthropic—all of them compute-hungry giants.

The company's contracted revenue backlog reached $132.5 billion at the end of September, up from the $104 billion disclosed at the end of June. In the early part of the third quarter alone, CoreWeave signed more than $25 billion in new customer commitments, which is what pushed the backlog to this level.

Orders keep piling up, but orders are not cash in hand. Chips, power, land, and infrastructure all require upfront spending, while revenue is recognized on a progress basis only after delivery and services are up and running. Of the backlog at the end of June, about 41% will convert into reported revenue over the following 24 months. These major customers are themselves frantically building data centers, and whether they will still be willing to lease externally down the road is another question mark hanging overhead.

What worries investors most is the lifeline of financing. CoreWeave has some junk-rated bonds maturing in 2031, whose yields at one point climbed to around 16%. In mid-October, yields on some of its unsecured bonds also climbed to around 15%. On Tuesday the company itself said it would not borrow in the unsecured debt market at current yields—which, read in reverse, is an admission that borrowing is simply too expensive right now.

Fortunately, $9 billion in customer prepayments and deposits will flow in over the next three months, providing some temporary relief. The market's biggest fear is that the company cannot go a single day without cheap money; once bond yields continue to climb, the refinancing hole will only grow larger.

CoreWeave's origins set it apart from its peers. It started in 2017 as an Ethereum mining operation, pivoted to a cloud platform only in 2020, and listed on Nasdaq in 2025—by the most generous count, it has been public for just over a year and a half. Nvidia is both its supplier and its shareholder, and has also committed to take unsold compute capacity off its hands before 2032.

Microsoft alone accounted for about 67% of its 2025 revenue; once a major customer slows its leasing, the entire cash chain will fluctuate accordingly. Jensen Huang has spoken up for the company, publicly saying that CoreWeave's financial strength is improving and its cost of capital is falling. It is precisely this tie that gives it the confidence to keep borrowing heavily to build data centers even when the market is most panicked.

But the founders of short-seller Seawolf—the very people who were the real-life prototypes for the film The Big Short—compare CoreWeave to WeWork in its heyday, on the grounds that both require heavy upfront capital investment and both cannot do without continuous cheap financing. They also point out that GPU technology iterates faster than aircraft or drilling platforms, so older cards may depreciate ahead of schedule.

What Seawolf is betting on is that CoreWeave will not hold up in the face of higher interest rates. In the week of mid-October, the Philadelphia Semiconductor Index fell more than 11%, and peers such as Nebius and Applied Digital slid along with it. On the other side, Goldman Sachs upgraded the stock to Buy on October 19, believing the company can still raise money to keep expanding.

Gartner predicts that by 2030, more than 80% of these new cloud vendors will no longer operate independently. By "new cloud vendors," it means players like CoreWeave that built their business specifically on renting out GPUs.

In after-hours trading, CoreWeave rose 5.83% to $51.57 a share. But over a longer stretch, it has still lost more than 40% over the past month, and compared with a level near $100 at the end of the second quarter this year, it has already been cut in half.

The promise of profitability only in 2028 must bridge, in the interim, annual spending of nearly $40 billion and debt that could exceed $50 billion.