CoreWeave shares surged more than 16% after the AI cloud provider disclosed on its earnings call that it is largely sold out through 2027, with qualified customer demand running at 10 times available capacity and 2028 demand already several times larger than supply. That shortage enabled CoreWeave to raise prices by 25% in July and another 10% later in the third quarter, while rental rates for older Nvidia Ampere and Hopper GPUs jumped 30% to 50% from the prior quarter to levels above their original contracts.

To fund its expansion without tapping the unsecured bond market where its notes recently yielded over 16%, CoreWeave plans to launch a multibillion-dollar, investment-grade delayed draw term loan within weeks backed by chips and customer contracts. Management expects the facility to price at a 7% to 7.5% yield and cover more than 90% of associated capital spending, leaving less than $5 billion in new parent-level capital needed through 2027. More than 75% of committed capital spending through 2027 is tied to investment-grade and enterprise customers, and the company has collected prepayments on 70% of its deals this year, with some clients paying up to 100% of their contract value upfront.

Short-term contracts now generate more than $40 million in annual revenue per MW, paying back hardware costs in six to 18 months, compared with $20 million to $25 million per MW on four- and five-year deals. CoreWeave also has more than 130,000 already paid-off GPUs coming off contract in 2027 and roughly 170,000 in 2028, which management estimates could bring in nearly $10 billion in annualized renewal revenue at current prices without new capital spending. The disclosures followed third-quarter results showing revenue up 168% to $3.66 billion, a $132.5 billion backlog, and active power doubling this year to more than 1.7 GW, though debt reached $46.9 billion and fourth-quarter interest expense is projected at $1.05 billion to $1.15 billion.