Nvidia-backed CoreWeave (CRWV) stock entered another earnings season with Wall Street looking for another quarter marred by heavy CapEx and losses.
Analysts were looking at $2.56 billion in sales with an adjusted loss of $1.41 per share.
Instead, CoreWeave delivered another sizeable double beat, delivering $2.58 billion in revenue, posted a smaller-than-expected loss, while raising its full-year outlook.
Consequently, as CoreWeave reported its Q2 2026 earnings after market hours on Tuesday, August 11, 2026, the stock experienced a tremendous pop.
According to Investing, the stock surged nearly 14% after hours, with Reuters reporting another 19% on August 12, having closed at $90.32 before earnings.
Following the strong snapback, CoreWeave stock is now up 21% for the month and 50% year-to-date, according to Seeking Alpha data.
CEO Mike Intrator called it “an exceptional quarter for CoreWeave”, adding that the company “outperformed our plan across the board”.
That was enough to force Wall Street to rethink its position in the AI giant.
Bank of America did just that after the print, changing multiple key forecasts while keeping one major call intact.
Why Bank of America still sees major upside in CoreWeave
Bank of America came away from CoreWeave’s Q2 results confident in its growth trajectory.
More AI:
- Nvidia just made a move Wall Street wasn’t ready for
- Microsoft just took sides in AI policy fight
- OpenAI just disclosed something genuinely alarming
Consequently, the bank’s analysts reiterated their ‘Buy’ rating and a $140 price target, implying 30% upside after the stock’s post-earnings pop.
Q2 sales surged 112% year over year to $2.575 billion, slightly ahead of BofA’s $2.52 billion estimate. Operating margin reached 5%, compared to the Street’s 2.8% expectation, while the company posted a loss of $1.03 per share, narrower than BofA’s $1.16 loss estimate.
Perhaps the bigger signal came from capacity.
CoreWeave added 500 megawatts of active power during Q2, taking active capacity from 1 GW to 1.5 GW. Around 300 MW came online in June alone. As a result, management bumped its year-end active-power target to at least 1.85 GW, from 1.7 GW previously.
Power availability is viewed as a bridge between CoreWeave’s massive backlog and actual sales generation. For context, remaining performance obligations jumped $104.2 billion, up about $4.8 billion sequentially, while another $25 billion-plus of commitments signed early in Q3 weren’t included in the figure.
Given the impressive strength shown, BofA bumped its sales forecasts across the board.
Its 2026 estimate rose from $12.51 billion to $12.84 billion, 2027 moved from $25.20 billion to $25.96 billion, and 2028 rose from $39.89 billion to $41.03 billion.
However, the important twist is that BofA feels borrowing to finance spending associated with the larger revenue base will clip away at earnings in a big way.
As a result, it lowered EPS estimates, now expecting a $3.93 loss in 2026, compared to $3.54 previously, a $0.89 loss in 2027, versus $0.54, and $2.68 of EPS in 2028, down from $3.16.
Why lower EPS forecasts do not weaken BofA’s margin thesis
The more interesting part of BofA’s note was that its EPS estimates actually dropped while its operating-margin outlook improved.
BofA expects the operating margin to be nearly 8.3% in 2026, compared with 8% previously. Moreover, its 2027 estimate rose slightly to 15.9%, while its 2028 forecast moved to 19%, from 18.8%.
Moreover, the bank expects momentum to grow in the back half of the year.
It’s modeling operating margin to rise from 5% in Q2 to 6.6% in Q3 and 14.6% in Q4 as recently activated infrastructure begins generating sales.
Also, CoreWeave is apparently gaining pricing power.
Contracts signed during Q2 carried contribution margins 5 to 10 percentage points higher than earlier periods. Additionally, the neocloud operator implemented a nearly 25% price increase in July, on the back of scarce AI infrastructure capacity and improving customer economics.
As a result, that switches up the economics of the story.
CoreWeave isn’t just tying to deploy more GPUs. If newer contracts are signed at materially better returns, each incremental block of capacity will become more profitable.
Paired with higher-margin ancillary businesses and short-duration enterprise contracts, they could eventually support an operating-margin range above 25% to 30%.
That’s why BofA assigns CoreWeave a premium valuation, based on 26 times estimated calendar-2027 EV/EBIT, comfortably above the 14 to 19 times range it cites for cloud data centre peers.
CoreWeave investors still face a very expensive growth story
CoreWeave’s bull case comes with its fair share of financial and execution risks.
BofA explicitly flagged stock-price volatility, customer concentration, supplier concentration and competition from bigger cloud providers, including Microsoft Azure, Google Cloud and Amazon Web Services.
Its rivals have far deeper pockets and considerable more financial capacity to continue funding infrastructure investment.
On top of that, customer concentration is also pretty important.
Large hyperscaler and AI-native contracts can add billions of dollars to the backlog, but a heavy reliance on just a small group of customers means the loss or repricing of a major contract has an outsized impact.
Moreover, there’s the financing burden to consider.
BofA’s own model suggests CoreWeave could potentially burn nearly $23.8 billion of free cash flow in 2026 and $22.9 billion in 2027, before we see the deficit narrowing out substantially in 2028.
Therefore, its investors are effectively told to tolerate a lot of that cash consumption while the infrastructure necessary to support future earnings is being built.
That makes execution doubly important.
Consequently, for investors, the next major checkpoints go beyond whether CoreWeave can continue beating quarterly revenue expectations.
Active-power additions, backlog conversion, pricing on new contracts, customer diversification, and liquidity positioning could ultimately determine a premium valuation.
So far, the encouraging bit is that those operating fundamentals are moving in the right direction, with sales expected to rise exponentially.
For color, Core Weave stock is changing hands at 7.3 times trailing 12-month sales, but that figure drops to 3.9 times on a forward basis according to Seeking Alpha data.
