CoreWeave, an AI-powered cloud computing company, reported a 207% year-over-year revenue increase in its second quarter, surpassing analysts' estimates amid a surge in AI demand. Despite this strong revenue growth, the company’s shares have declined sharply, falling as much as 33% since the earnings announcement. The stock price drop is attributed to larger-than-expected losses driven by increased costs associated with AI development and rapid scaling, as well as concerns over high debt levels. The company also faced a cautious outlook, complicated by the divestiture of its defense laser business, which negatively impacted guidance by $20 million. CoreWeave’s shares remain up nearly 150% since their IPO, which saw the stock price more than quadruple by mid-June. Some investors, including Cathie Wood, have taken the opportunity to buy shares amid the selloff. Analysts continue to question CoreWeave’s financial health and profitability prospects, noting that substantial capital expenditures are expected to continue in upcoming quarters.