CoreWeave (CRWV) stock dropped as much as 8% in premarket trading Thursday after the company's capital expenditure forecast blew past Wall Street's expectations and as the Nvidia-backed (NVDA) AI data center firm burns through cash to acquire more AI chips.

CoreWeave executives said in a call following its first quarter earnings report that the company expects to spend $20 billion to $23 billion in 2025, more than the $18.3 billion projected by Wall Street analysts, according to Bloomberg consensus estimates.

The company is one of the largest holders of Nvidia’s graphics processing units and rents its data center capacity to Big Tech firms such as Microsoft (MSFT) and Meta (META) as they scramble to power their AI ambitions.

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DA Davidson analyst Gil Luria downgraded the stock to an Underperform rating from Neutral on Thursday morning, citing the "level of capital intensity equity investors are unlikely to stomach."

Luria also noted CoreWeave's soaring interest expenses, or payments on the debt it has used to fund its business. The company's interest expenses rose 549% to $264 million in the first quarter, more than the $182 million expenses projected by Wall Street, per Bloomberg data.

CoreWeave has a significant amount of debt — roughly $12 billion worth of debt commitments with very high interest rates, according to Luria. CoreWeave uses its debt, borrowed against its store of Nvidia GPUs as collateral, to buy more Nvidia chips.

“The risk is this is a company that is borrowing at extraordinarily high interest rates in order to buy a product that depreciates very rapidly in terms of its economic value,” Luria told Yahoo Finance in an interview Wednesday.

CoreWeave CFO Nitin Agrawal said that the higher spending is "fundamentally driven by increased customer demand."

The stock had jumped as much as 11% earlier in after-hours trading on Wednesday after it released its first earnings report as a public company. The results featured first quarter revenue that topped analyst estimates as well as a bullish outlook for the year.

CoreWeave reported revenue of $981.6 million for the three months ending March 31, ahead of the $862.3 million expected by Wall Street analysts, according to Bloomberg estimates.

The company projects revenue of $1.06 billion to $1.1 billion for the second quarter and $4.9 billion to $5.1 billion for the full year, higher than Wall Street analysts’ projections of $1.04 billion for the second quarter and $4.6 billion for the year, according to Bloomberg data.