CoreWeave announced a partnership with Leidos Holdings to deliver artificial intelligence cloud services to United States federal agencies, enabling them to deploy and operate AI infrastructure at scale. The agreement specifically addresses requirements from the U.S. Intelligence Community and Department of Defense, marking an expansion of CoreWeave’s addressable market beyond its existing commercial customer base.
The stock responded positively to the announcement, rising 21.5% intraday on July 30. Analysts viewed the partnership as significant for diversifying CoreWeave’s revenue streams, as government contracts typically provide stability and are distributed across multiple agencies. This diversification is particularly important for the company given its historical reliance on major customers for substantial portions of revenue.
CoreWeave operates as a GPU-powered cloud infrastructure provider serving AI developers and enterprises through data centers across the U.S. and Europe. The company reported Q1 revenue of $2.08 billion, up 111.6% year-over-year, and maintains a $99.40 billion revenue backlog. However, the company faces profitability challenges, with adjusted net loss margins widening from 15% to 28% year-over-year as capital expenditures surged to $6.80 billion in Q1.
Investors have expressed mixed sentiment about the company’s financial trajectory. Wall Street expects the company’s loss per share to deepen to $1.31 for Q2 and increase 69.9% to $4.57 for the full fiscal year, though losses are projected to narrow in the following year. Despite these near-term headwinds, analysts at Truist upgraded the stock to “Buy” with a $126 price target, while Baird initiated coverage with an “Outperform” rating and a $100 target. The consensus rating across 35 analysts is “Moderate Buy” with a price target of $136.15.
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