Wall Street is starting to warm up to AI infrastructure firm CoreWeave (CRWV) after months of doubt, thanks to several new business deals that ease concerns about its dependence on a single customer, according to Bloomberg. Indeed, at the end of June, Microsoft (MSFT) made up more than 70% of CoreWeave’s revenue. But now, recent agreements, including a new deal with Meta Platforms (META) worth up to $14.2 billion, are helping to diversify its customer base.
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Despite these positive developments, analysts remain split. In fact, Evercore ISI, led by five-star analyst Amit Daryanani, began covering CoreWeave with a Buy rating and a $175 price target. The firm believes that the strong demand will eventually turn into profits. However, some still argue that CoreWeave’s business burns too much cash and won’t hold up if AI demand cools. More specifically, Felix Wang of Hedgeye is still betting against the stock.
Separately, Gil Luria from D.A. Davidson, one of only three analysts with a Sell rating, sees over 70% downside due to massive losses and high costs for renting AI chips. He also claims that the company is “destroying value with every data center they build.” Still, bulls believe that growing AI demand will eventually make the business profitable. “This is just the beginning of the second phase of AI investment,” said Tejas Dessai, director of thematic research at Global X ETFs.
Is CRWV a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on CRWV stock based on 16 Buys, 11 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CRWV price target of $147.41 per share implies 9.1% upside potential.
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