Demand for data centers is expected to keep rising as hyperscalers compete amongst each other in today’s AI arms race. 

Since AI models perform gargantuan amounts of computations, AI firms need to build or lease data centers for model training and to keep their AI services running smoothly.

CoreWeave (CRWV), one of the market’s darlings in today’s AI frenzy, is a company that has benefitted heavily from surging data center demand.  

In its most recent earnings call, the company announced strong results, leading to revenues that beat analyst expectations and higher backlog.

Yet despite this, CoreWeave’s shares have dropped 16% since its earnings call earlier this week.

While this reaction may seem puzzling, Uniform accounting gives context for the recent slide.

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The skyrocketing demand for data centers has been a boon for companies involved in building or leasing these crucial facilities.

As artificial intelligence (“AI”) firms compete in today’s arms race, they need access to vast computational muscle. Data centers have become a crucial resource since they house the servers needed to operate and develop advanced AI models.

CoreWeave (CRWV), one of the market’s darlings in today’s AI frenzy, is a company that has benefitted heavily from surging data center demand.  

Founded in 2017 and taken public in March 2025, the company previously operated as a cryptocurrency mining firm that utilized its large supply of GPU-powered servers to mine ethereum.

In the wake of the 2018 cryptocurrency crash, CoreWeave reinvented itself and used its large cache of GPUs to offer cloud computing services to companies. And once the AI mania started with the public release of ChatGPT in 2022, the company firmly positioned itself as a provider of data center infrastructure for AI.

Another factor that firmly put the company on solid footing is its relationship with Nvidia (NVDA), as it has used the GPU designer’s highly sought after high-performance chips in many of its data centers.

Currently, the company offers a wide variety of cloud-related offerings and services including GPU-powered compute, storage, networking, VFX and rendering, AI model training, and AI inference. 

Recently, the company announced results for the third quarter of 2025.

CoreWeave generated revenues of $1.36 billion, beating the analyst expectations of $1.29 billion. This represents a 134% increase from the $583.9 million in the same quarter last year. Revenue backlog stands at $55.6 billion, which includes agreements from Alphabet (GOOG) and Microsoft (MSFT). The company also won an expansion from an unnamed firm.

However, revenue guidance was set between $5.05 billion and $5.15 billion, below analyst expectations of $5.29 billion. 

Despite these overall strong results, CoreWeave’s shares are down 16% since its earnings call earlier this week. 

Some reports have attributed this drop to the company’s revised guidance and an increase in capital expenditures amounting to between $12 billion and $14 billion this year, with that amount doubling in 2026 as the firm continues to scale its AI cloud capacity.

While this may seem puzzling at first glance, Uniform accounting paints a clearer picture, as it reveals why CoreWeave’s shares dipped.

It’s clear that CoreWeave is a crucial player in the AI boom as demand for its cloud services are strong. However, it’s a business with sky-high expectations that has yet to generate positive earnings.

We can see this through the Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price, and calculates what the market expects from future cash flows.

Comparing that with Valens’ own cash-flow projections, it can tell investors how well a company has to perform in the future to justify what the market is paying for it today.

Despite being a business that’s yet positive returns, the market is expecting CoreWeave to generate over $3 billion in Uniform earnings by 2029. 

For comparison, that’s the same amount investors are expecting for 122-year-old carmaker Ford (F).