CoreWeave (CRWV) stock dropped 16% after a disappointing quarterly outlook, with operating income expected to fall below analyst estimates. Analysts cite high interest expense as a main issue, as the company rents data center capacity to tech giants like Microsoft, Meta, and Google for AI needs. Critics warn of potential failure due to high debt and customer contract risks.

Despite lower-than-expected earnings, CoreWeave reported revenue exceeding projections, with CEO citing high demand for AI cloud services. Analysts remain bullish on the company, with Deutsche Bank raising price outlook but attributing stock drop to lock-up expiration anticipation. The company went public in March.

Read more at Yahoo Finance: CoreWeave stock plummets as AI cloud company reports ‘deteriorating’ operating income outlook