Nvidia-Backed CoreWeave’s Stock Jumps as Analysts Launch Coverage—Here’s What They’re Saying

Key Takeaways

• CoreWeave’s shares surged on Tuesday after several analysts began to cover the artificial intelligence company with targets that suggest they see gains in the stock.
• Analysts have said that CoreWeave is well-positioned to profit from the rising demand for AI, but they have also noted risks related to its AI business and concentrated revenue sources.
• With Tuesday's gains, the stock neared its initial public offering price of $40.

CoreWeave shares (CRWV), which are artificial intelligence-based, surged on Tuesday after several analysts began to cover the stock with price targets that suggest they expect gains.

Shares of Nvidia’s cloud computing company (NVDA) rose over 8% during Tuesday’s trading. They were near their $40 initial public offering and down from their record close of $61.36 on April 2, which was a year ago.

Jefferies analysts on Tuesday initiated coverage with a "buy" rating and a price target of $51, as they said CoreWeave could be "well positioned to capture" growing demand for AI compute. Analysts from Bank of America, Mizuho, and JPMorgan also issued "buy" ratings, with price targets of $42, $46, and $43, respectively.

However, JPMorgan analysts cautioned they expect the stock could "provide a wild, lumpy, volatile ride, requiring a risk tolerance that may not exist for most investors."

Analysts have noted that CoreWeave is a business that is heavily AI-centric, and that its revenue is highly concentrated. Microsoft (MSFT), for example, accounted for more than half of CoreWeave’s revenue last year.

Analysts from Citi gave CoreWeave a "neutral" rating and $43 price target, calling it a "high risk" investment where they "would like to see a few quarters play out before getting off the sidelines." Morgan Stanley and Deutsche Bank analysts were also "neutral" on the stock, with price targets of $46 and $45, respectively.