Traders Brace for 20.7% CoreWeave Swing on Earnings, Texas and Debt Risks

Traders in the options market see CoreWeave (CRWV) shares swinging roughly 20.7% — equal to $9.65 — in either direction when the AI cloud company posts earnings Tuesday, November 10.

That compares with the 13.8% and 12.5% moves options had priced in ahead of earlier reports. The stock has also ended lower after five of the company's six earnings releases, leaving shareholders with losses.

Why Are Traders Preparing for Such a Large Move?

CoreWeave supplies AI developers with computing capacity powered by Nvidia. A day after falling 9.83% to a 52-week low of $40.58, the shares closed Friday at $46.40, up 6.28%. The stock has traded as high as $138.25 over the past year.

Thursday's decline came after the US midterm elections. Voters in Texas elected Democrat Gina Hinojosa as governor, and she has called for a statewide halt to new AI data center construction, a shift with potential consequences for operators of data centers in Texas.

CoreWeave CEO Michael Intrator wrote to Hinojosa on Saturday, offering to help complete projects that have already been approved.

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

Financing costs are weighing on CoreWeave's debt-backed AI expansion. Yields on its corporate bonds climbed above 17% in early November.

Interest expenses for the third quarter are expected to come in between $860 million and $940 million, compared with $640 million in the second quarter.

What Does Tuesday's Earnings Report Need to Deliver?

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

The most recent quarterly report broke the losing streak. Shares jumped 19% in August after that report beat estimates.

Rival Nebius (NBIS) is scheduled to report Thursday before the market opens. Its shares climbed 34% after its own August results.

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

Tuesday's call will give executives their first chance to address Texas exposure and debt costs together. Nebius reports two days later, testing whether investors are still willing to pay for leased AI computing power.