Deepti Sri
4 min read
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Shares are eyeing their strongest week since Nvidia’s May 2025 disclosure of a 7% stake.
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The brokerage firm cut fair value to $98 from $108, citing dilution risk, and expects no positive free cash flow before 2033.
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CoreWeave reportedly seeks a $4 billion investment-grade loan and expects $9 billion in customer prepayments and deposits.
Shares of CoreWeave (CRWV) fell over 7% overnight heading into Thursday, giving back part of a blockbuster earnings rally even as Morningstar said that fears over its borrowing costs had created a buying opportunity.
CRWV stock jumped 25% to $60.77 on Wednesday, taking its weekly gain to about 31% and putting it on track for its strongest week since Nvidia’s May 2025 stake disclosure. Shares rallied 56% then after Nvidia revealed a 7% stake, up from the 5.2% shown in CoreWeave’s IPO prospectus.
Stronger revenue, a brighter outlook and easing funding fears powered this week’s rally before uncertainty over Jensen Huang’s future at Nvidia hit CRWV overnight. CEO Michael Intrator also said that the Nvidia partnership went beyond any one executive and revealed he had canceled his personal stock-selling plan.
Morningstar Sees Bargain Beneath Debt Fears
Morningstar sees a buying opportunity in CoreWeave’s selloff, saying that debt-market worries and the midterm election have fueled “excessive skepticism” about its operations.
“With over $20 billion available for near-term deployment, we think recent concerns about the company’s debt yield are overblown,” the firm said. Contract-backed loans remain near face value, while an investment-grade facility could yield below 7.5%.
The firm cut its fair value estimate to $98 from $108, still about 61% above current levels, to reflect potential dilution. “The company may step up the issuance of new equity or convertible notes at the parent company level, which is more conventional but can dilute existing shareholders,” it said.
Strong growth would still leave profits years away. “Despite our five-year compound annual revenue growth forecast of 71%, we do not expect GAAP earnings per share to turn positive over the next three years,” Morningstar said. Heavy spending would also delay cash generation. “Similarly, free cash flow would not turn positive before 2033.”
The firm assigns CoreWeave no economic moat and a ‘Very High Uncertainty’ rating. Even if annual revenue eventually exceeds $100 billion, it expects returns on invested capital to struggle to cover the cost of capital.
