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LivestreamMenuInvestors should scoop up CoreWeave before the stock bounces back, according to Truist Securities. The bank upgraded the cloud infrastructure name to buy from hold. It lowered its price target on shares to $126 from $131, though that still implies 58% upside from Tuesday’s close. “We view CRWV’s risk-reward as attractive as: 1) Continuing enterprise adoption of open models/sovereign AI is supportive of broadening demand, 2) CRWV trades at a significant discount to neoclouds despite its leadership position, and 3) Potential for incremental margin expansion if current 6-yr GPU depreciation cycles prove conservative,” analyst Arvind Ramnani said Tuesday in a note to clients. Shares of the cloud infrastructure firm have fallen 35% over the past three months, putting them roughly 48% off their 52-week high of $153.20. CRWV 3M mountain CRWV 3mo chart The plunge comes after CoreWeave reported in early May that its interest expense more than doubled during the first quarter. That rising debt load has raised concerns over the sustainability of CoreWeave’s business. In July, the company’s stock also took a hit after Meta announced it would sell its excess artificial intelligence computing capacity to third-party developers, putting it in direct competition with CoreWeave. That push by Meta, a current cloud capacity client of CoreWeave, may not weigh on shares as heavily as expected, however, Ramnani noted. “While we view Meta’s entry into the space as a risk, we believe Meta will maintain its existing contracts/terms,” the analyst wrote. “If Meta does not renew, we expect other enterprises to absorb the computing capacity.” Truist’s call falls in line with consensus on the Street. Of the 38 analysts covering CoreWeave, 24 have a buy or strong buy rating on the stock, LSEG data shows.Read More
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