Financing pressure cannot suppress outstanding execution; Citi maintains a "Buy" rating on CoreWeave (CRWV.US) with a target price as high as $128.

Amid a challenging financing and data center construction backdrop, CoreWeave (CRWV.US) delivered a strong third-quarter report card. In a research note, Citi pointed out that CoreWeave achieved broad-based beats across revenue, capacity, pricing, and profitability, demonstrating "excellent execution within a controllable range." Based on this, Citi maintained its "Buy/High Risk" rating with a target price of $128. **Comprehensive Beat Across the Board, Full-Year Guidance Significantly Raised** Financial data shows that CoreWeave's third-quarter revenue reached $3.661 billion, not only exceeding the midpoint of company guidance by $136 million, but also far surpassing Citi and Wall Street consensus expectations of $108 million and $110 million, mainly driven by strong pricing power and capacity delivery. On profitability, the adjusted operating margin reached 10.4%, beating Citi and Wall Street expectations by 330 to 350 basis points, expanding 540 basis points quarter-over-quarter; the adjusted loss per share was $0.95, better than Citi and Wall Street forecasts of $1.18 and $1.20. Additionally, due to accelerated delivery progress, capital expenditures excluding construction in progress reached $14.5 billion, exceeding Citi and Wall Street expectations by 14% and 17%. Supported by strong demand trends and steady progress on customer commitments, management significantly raised fourth-quarter and full-year guidance. Full-year revenue guidance was raised from the prior RMB12.4 billion to RMB13.2 billion to RMB13.0 billion to RMB13.3 billion; the lower bound and midpoint of year-end ARR (annual recurring revenue) were both raised by $1.5 billion to $20 billion to $21 billion, with the midpoint up 226% year-over-year, above Citi and Wall Street expectations of $19.3 billion and $19.0 billion. Full-year operating income guidance was raised to $1.275 billion to $1.375 billion, with the midpoint growing 26%. Based on this, the fourth-quarter operating margin midpoint is approximately 16.5%, far exceeding the upper end of buy-side expectations. Citi noted that driven by strong execution, CoreWeave's stock price is expected to rise modestly. **Capacity and Orders Steadily Expanding, Customer Mix Continues to Diversify** On the operational front, CoreWeave's active power capacity increased by more than 200 megawatts quarter-over-quarter, with total capacity surpassing 1.7 gigawatts. Although slower than the approximately 500 megawatts growth in the second quarter, it was in line with market expectations. Contracted power capacity surged by more than 900 megawatts, with total capacity exceeding 4.6 gigawatts, including more than 1.3 gigawatts of international business. Revenue backlog reached $132.5 billion, up 138% year-over-year, with approximately $28 billion added quarter-over-quarter, broadly consistent with the over $25 billion in commitments signed at the beginning of the third quarter but not included in second-quarter data. However, the year-over-year growth rate of short-term contract liabilities (CRPO, within 24 months) slowed from 177% in the previous quarter to 114%. On customer expansion, the quarter added new brand customers including Canva, Substack, and Wayne, while existing customers such as OpenAI, Jane Street, and Perplexity expanded their cooperation, further diversifying the customer mix. On the technology front, Vera Rubin NVL72 has begun running production workloads (delivering 4.8x GB200 token throughput for Cognition). It is worth noting that backlog growth was relatively modest, which Citi believes may indicate the company is focusing more on financing and prepayments. Management disclosed that customer prepayments and deposits will reach approximately $9 billion in the next three months alone, providing additional liquidity support for ongoing infrastructure construction.