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FinanceCoreWeave stock plunges as Meta plans to enter cloud AI computing market
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Shares of CoreWeave (CRWV) fell sharply after news broke that Meta Platforms (META) is building a cloud business to sell spare AI computing power, directly competing with one of its largest customers. Meta, which has a total contract commitment of around $35 billion with CoreWeave including a $21 billion deal through 2032, plans to spend up to $145 billion this year on data centers and GPUs. The move follows a similar strategy by Elon Musk's SpaceX, which sells extra computing capacity to Anthropic and Google. CoreWeave, part of the rapidly growing neocloud market, saw its stock drop over two trading sessions, though the company reported strong Q1 2026 results with revenue more than doubling and $40 billion in new customer bookings. Analysts project CoreWeave revenue growing from $5.13 billion in 2025 to $82 billion in the future, but Meta's entry into the market raises concerns about competition and customer concentration risk.
Source report
Aditya Raghunath Tue, July 7, 2026 at 2:33 PM PDT | 4 min read
- META: -2.02%
- CRWV: +7.75%
Shares of CoreWeave took a hard hit after news broke that Meta Platforms is building a cloud business to sell spare AI computing power.
The tech stock fell sharply over two trading sessions last week and is currently valued at a market cap of $64.4 billion.
Notably, Meta (META) is one of CoreWeave's (CRWV) biggest customers. The two companies, who were partners last month, are now competing in a rapidly expanding market.
Meta's Move Rattles CoreWeave Investors
According to CNBC, Meta will sell its unused computing power to other enterprises, a plan first reported by Bloomberg.
As per a CNBC report:
- Meta is still deciding whether to offer full access to AI models running on its servers or simply rent out raw computing power to other companies.
- Meta has not publicly confirmed the plan. Still, Meta CEO Mark Zuckerberg hinted at this possibility months ago.
- He told investors during the company's Q3 earnings call that a move into cloud services was "on the table."
- He repeated that message at Meta's annual shareholder meeting in May, saying that if the company ends up with more AI infrastructure than it needs, "that is an option that we have."
- Meta plans to spend up to $145 billion this year building data centers and buying graphics processing units (GPUs) needed to train and run AI models.
Turning unused capacity into a new revenue stream would ease pressure on that massive spending, pushing Meta stock higher following the news.
Related: Meta just picked a fight with Amazon's cash cow
Meta is following a path Elon Musk's SpaceX already took this year by selling extra computing capacity.
SpaceX has struck deals with Anthropic, which pays $1.25 billion a month for capacity, and Google, which pays $920 million a month, per CNBC.
What It Means for CoreWeave's Business Model
According to Reuters, Meta is one of CoreWeave's largest customers, with a total contract commitment of around $35 billion, including a $21 billion deal that runs through December 2032.
Meta could either host AI models that developers pay to use or sell GPU access directly. If it hosts AI models, the tech giant primarily competes with software services. However, if Meta sells GPU access, it would compete with CoreWeave and peers such as Nebius.
CoreWeave is part of the neocloud market, which is growing rapidly. A research report from Mordor Intelligence projects the total addressable market to expand from $24 billion in 2025 to $236.5 billion in 2031, indicating a compounded annual growth rate of over 45%.
Story Continues
In Q1 of 2026, CoreWeave more than doubled its revenue, which indicates it is outpacing broader industry growth and gaining market share.
Michael Intrator, CoreWeave CEO, stated:
"Q1 was a transformational quarter for CoreWeave. We delivered our strongest quarter for customer bookings, signing more than $40 billion of new commitments and growing contracted revenue backlog to nearly $100 billion."
Analysts tracking CoreWeave stock forecast revenue to increase from $5.13 billion in 2025 to $82 billion in 2030.
Source
Yahoo FinanceWestern
Part of this Story
Meta Plans Cloud Business to Sell Excess AI Computing Capacity