CoreWeave (CRWV) stock whipsawed Thursday as investors digested its high capital expenditure forecast and a new $4 billion deal with OpenAI.

Shares of the Nvidia-backed (NVDA) AI data center firm rose as much as 8% and fell as much as 9% during the trading session before ending the day down around 2.5%.

CoreWeave's capital expenditure outlook, coming as part of its first-ever earnings update as a public company, raised concerns from Wall Street. CoreWeave executives said 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.

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."

Even with Thursday's dip, the stock was up more than 68% since its debut in March.

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Also on Thursday, CoreWeave said in a regulatory filing to the US Securities and Exchange Commission that it had secured a $4 billion deal with OpenAI in May in addition to its previously reported $11.9 billion commitment from the AI startup. CoreWeave said the OpenAI deals contributed to its high revenue outlook for the upcoming quarter and full year, which surpassed Wall Street's expectations.

CoreWeave executives said in a call with analysts late Wednesday that they expect the company to record $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 analysts’ projections of $1.04 billion for the second quarter and $4.6 billion for the year, according to Bloomberg data.