Tipranks – Tipranks – 41 minutes ago
Investment firm MoffettNathanson began coverage of CoreWeave (CRWV) with a Neutral rating and a $43 price target. The cloud computing data center company recently went public in late March after a highly anticipated IPO. Analysts led by Nick Del Deo explained that the bull case is simple: CoreWeave focuses on AI infrastructure at a time when demand is very strong and supply is tight.
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Indeed, the analysts noted that CoreWeave has done a good job of standing out by quickly bringing new GPUs to market and managing large-scale deployments. Furthermore, they believe that the company is earning solid returns on its investments. However, they also highlighted important risks. As supply and demand for GPUs eventually balance out, major customers like Microsoft (MSFT) may need fewer outsourced computing services. In addition, big cloud providers (hyperscalers) that are developing their own chips could increase competition. As a result, that could hurt CoreWeave’s pricing and profitability.
Another concern is that some of CoreWeave’s customers, such as OpenAI, which recently signed a nearly $12 billion deal, don’t have the same financial strength as large tech firms, therefore making debt financing riskier. The analysts also believe that hyperscalers are better positioned to serve large businesses and will likely become stronger competitors over time. While CoreWeave’s growth outlook and financial performance were better than the analysts initially thought, they still see too many risks to justify a more bullish view right now.
Is CoreWeave Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CRWV stock based on seven Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CRWV price target of $47.42 per share implies 8.6% downside risk.
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