Options traders are pricing a move of about 20.7%, or $9.65, in either direction for CoreWeave (CRWV) stock after the AI cloud company reports earnings on Tuesday, November 10.
That is far wider than the 13.8% and 12.5% swings options priced before earlier reports. Shareholders also hold a stock that has fallen after five of its six earnings reports.
Why Is the Market Bracing for Such a Big Move?
CoreWeave rents Nvidia-powered computing capacity to AI developers. Its shares closed Friday at $46.40, up 6.28%, a day after sliding 9.83% to a 52-week low of $40.58. The stock traded as high as $138.25 within the past year.
Thursday’s drop followed the US midterm elections. Texas voters chose Democrat Gina Hinojosa as governor, and she has called for a statewide pause on new AI data center construction, a shift that could hit Texas data center operators.
On Saturday, CoreWeave CEO Michael Intrator wrote to Hinojosa offering to work on finishing already-permitted projects.
“You have made clear that data center growth must work for Texas. We strongly support those principles,” he said.
Borrowing costs weigh on CoreWeave’s debt-funded AI buildout. Yields on CoreWeave’s corporate bonds rose above 17% in early November.
The company expects third-quarter interest costs of $860 million to $940 million, up from $640 million in the second quarter.
What Does Tuesday’s Report Need to Show?
CoreWeave guided third-quarter revenue of $3.45 billion to $3.60 billion. Analysts tracked by Zacks expect a loss of $1.45 per share, against a $0.31 loss a year earlier.
The last report broke the losing pattern. Shares jumped 19% in August after results beat estimates.
Rival Nebius (NBIS) reports Thursday before the open. Its shares surged 34% after its own August results.
Of 29 analysts tracked by TipRanks, 21 rate CoreWeave a Buy and three a Sell, with targets ranging from $39 to $250.
Tuesday’s call gives management its first chance to address Texas exposure and borrowing costs together. Nebius reports two days later, testing whether investors still pay up for rented AI computing power.
