CoreWeave stock pops 8% on Perplexity deal: is the selloff over?

CoreWeave shares rose in early trading on Wednesday after the artificial-intelligence infrastructure company unveiled a multi-year partnership with AI search engine Perplexity, offering investors a fresh catalyst following a turbulent week for the stock.

The shares were up by over 8% after the announcement, reversing some of the sharp losses suffered after last week’s earnings report.

Under the agreement, Perplexity will use CoreWeave’s cloud-computing platform to pilot new services and power its AI inference workloads, which involve deploying large language models to generate responses and solve complex problems.

CoreWeave, in turn, will roll out Perplexity Enterprise Max, the search company’s most advanced enterprise product, for use across its own workforce.

Financial terms of the deal were not disclosed.

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Focus on AI-optimized infrastructure

CoreWeave, which went public last March, has become closely associated with the so-called neocloud providers — companies operating data centers packed with advanced AI chips to meet surging demand for generative AI applications.

The company said it will run Perplexity’s inference workloads on Nvidia’s rack-scale GB200 AI servers, underscoring its alignment with the chipmaker’s latest hardware.

“AI applications running in production require more than just access to raw infrastructure,” said Max Hjelm, CoreWeave’s senior vice president of revenue.

“They require best-in-class performance and reliability as well as a cloud platform designed end-to-end for AI that simplifies compute operations.”

The partnership announcement comes at a critical moment for CoreWeave.

Wednesday's gain offsets some of last week's losses

CoreWeave's stock fell nearly 25% last week as investors reacted to a wider-than-expected quarterly loss and cautious near-term guidance.

The company reported a fourth-quarter loss of $0.56 per share, wider than Wall Street’s estimate of a $0.50 loss.

Revenue surged 110% to $1.57 billion, beating forecasts, but first-quarter sales guidance of $1.9 billion to $2.0 billion fell well short of the $2.29 billion analysts had expected.

The company also projected fiscal 2026 revenue of $12 billion to $13 billion and unveiled plans to lift capital spending to between $30 billion and $35 billion to expand its data center footprint.

That heavy investment plan raised concerns about cash burn and near-term profitability.

Prominent investor Michael Burry added to the skepticism last week, describing CoreWeave as an off-balance-sheet special purpose vehicle designed to lose money and comparing it to telecom infrastructure firms during the dot-com era.

He warned that the rapid depreciation of AI hardware could pose additional risks.

Despite the criticism, Chief Executive Mike Intrator has characterized the recent volatility as a byproduct of what he calls a once-in-a-generation buildout of AI infrastructure.

Nvidia last month invested $2 billion in CoreWeave to support its ambition of adding more than 5 gigawatts of AI computing capacity by 2030.

Wednesday’s rally suggests some investors are willing to look beyond near-term headwinds and focus on long-term demand for AI-optimized cloud capacity.