TLDR
- CoreWeave plans to spend up to $6 billion on a new AI data center in Pennsylvania as part of Trump’s AI infrastructure push
- Stock rose over 8% in premarket trading following the announcement Tuesday
- The facility will start with 100 MW of power and potentially expand to 300 MW, creating 600 construction jobs
- Investment comes one week after CoreWeave’s $9 billion acquisition of Core Scientific, which has caused stock to drop 20%
- Top investor Stone Fox Capital calls the market reaction an overreaction, rating the stock a buy despite Wall Street’s cautious Hold consensus
CoreWeave shares jumped over 8% in premarket trading Tuesday after the AI cloud computing company announced plans to invest up to $6 billion in a new Pennsylvania data center. The announcement comes as President Trump pushes to maintain America’s edge in artificial intelligence infrastructure.
The investment will be revealed during a CEO roundtable with Trump at Senator Dave McCormick’s inaugural Pennsylvania Energy and Innovation Summit. Trump is expected to announce $70 billion in AI and energy investments on Tuesday, according to Reuters.
“The demand for high-performance AI compute is relentless, and CoreWeave is scaling a cloud purpose-built for AI to meet it and strengthen U.S. leadership,” said CoreWeave CEO Michael Intrator. The data center will initially use 100 megawatts of power with potential expansion to 300 MW.
The project is expected to create approximately 600 jobs during construction. About 70 full-time technical and operational positions will be available at launch.
CoreWeave’s investment adds to hundreds of billions of dollars companies have committed to expanding AI infrastructure in the United States. Last month, Amazon announced plans to invest at least $20 billion in Pennsylvania to expand its data centers.
Recent Market Volatility
The positive market reaction Tuesday contrasts sharply with recent stock performance. CoreWeave shares have fallen more than 20% over the past week following details of the company’s $9 billion acquisition of Core Scientific.
The all-stock deal, announced July 7, involves purchasing the crypto miner to gain energy and data center capacity needed for surging AI demand. CoreWeave management highlighted the money-saving benefits of the transaction.
The company estimates the deal will help avoid $10 billion in future leases over the next 12 years. CoreWeave also projects $500 million in annual cost savings by the end of 2027.
Investor Perspectives Split
Despite the market’s negative reaction, top investor Stone Fox Capital believes the selloff represents an overreaction. The 5-star investor, ranked among the top 3% of TipRanks’ stock professionals, maintains a buy rating on the stock.
“The key investor takeaway is that the market overreacted to a natural deal to eliminate lease obligations and reduce costs while streamlining the implementation of new data center assets,” Stone Fox Capital stated. The investor argues the transaction provides CoreWeave with direct control over data center assets.
Stone Fox believes this control will promote quicker, more effective AI infrastructure deployments while improving efficiencies. “The operational savings will virtually cover the costs of the deal alone,” the investor added.
The recent weakness has created an opportunity for investors to acquire CRWV at 4x 2027 revenue targets. However, Stone Fox cautioned that a lock-up expiration in three months could cause heavy selling pressure.
Wall Street analysts offer a more cautious outlook. The consensus rating stands at Hold with 15 Hold ratings, 4 Buy ratings, and 1 Sell rating. The 12-month average price target of $99.31 suggests approximately 21% downside from current levels.
Stone Fox recommends investors use the recent weakness to “load up on the AI hyperscaler with the opportunity for a major rally prior to the lock-up expiration and Core Scientific deal close late this year.”
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