TLDR
- Cantor Fitzgerald initiated coverage of CoreWeave with Overweight rating and $116 price target, citing massive AI market potential
- Stock jumped 6% despite recent 21% monthly decline, still up 128% from $40 IPO price
- Company generates most revenue from large language model training but inference workloads expected to drive future growth
- Nvidia holds 5.1% stake and serves as both key supplier and customer in CoreWeave’s AI infrastructure business
- Wall Street maintains Moderate Buy consensus with average price target of $120.52, indicating 32% upside potential
CoreWeave stock climbed Wednesday after Cantor Fitzgerald launched coverage with positive ratings. The AI infrastructure company gained about 6% following the analyst firm’s bullish outlook.
Cantor assigned an Overweight rating with a $116 price target. Analyst Thomas Blakey highlighted what he called a balanced view of the company’s prospects.
The firm sees massive potential in artificial intelligence markets. But it also recognizes execution challenges that come with rapid expansion.
CoreWeave operates as a hyperscale cloud platform focused on AI applications. Most of its current revenue comes from large language model training services.
However, analysts expect inference workloads to become a bigger growth driver. This shift could expand the company’s market opportunity as businesses adopt AI-powered systems.
Partnership with Nvidia Powers Growth
Nvidia plays a central role in CoreWeave’s business model. The chip giant supplies the GPUs that power CoreWeave’s data centers.
Nvidia also holds approximately 5.1% of CoreWeave following its recent public offering. This creates an interesting dynamic where Nvidia serves as both supplier and investor.
Analysts estimate Nvidia contributes a meaningful portion of CoreWeave’s revenue. The relationship positions both companies to benefit from growing AI infrastructure demand.
Cantor’s team pointed to Nvidia’s vision of a trillion-dollar market for accelerated computing. The firm also highlighted similar opportunities in AI factories.
Recent Performance and Market Position
CoreWeave has experienced volatility since going public. The stock declined 21% over the past month following disappointing quarterly results.
The company reported a larger-than-expected loss in the second quarter. The expiration of IPO lockup restrictions also allowed early investors to sell shares.
Despite recent weakness, the stock remains well above its $40 IPO price. CoreWeave has gained 128% from that initial valuation.
Blakey’s $116 price target reflects an enterprise value-to-revenue multiple of 7x based on 2026 estimates. This compares to an 8x average for Cantor’s infrastructure software coverage group.
The analyst excluded Palantir Technologies from that comparison due to its premium valuation. CoreWeave’s multiple suggests reasonable pricing relative to growth prospects.
Other firms have also upgraded their views recently. Arete Research and H.C. Wainwright both raised ratings on CoreWeave stock.
Wall Street maintains a generally positive outlook on the company. Nine analysts rate the stock a Buy, while 13 recommend Hold ratings.
Two analysts have Sell recommendations. The average price target of $120.52 implies about 32% upside from current levels.
Cantor expects CoreWeave to benefit from long-term AI adoption trends. The firm sees particular strength in LLM training and inference applications.
However, the analyst noted potential risks ahead. Customer concentration could become an issue as the company scales operations.
Financing needs may also present challenges given the capital-intensive nature of the business. Power requirements for data centers add another layer of execution risk.
CoreWeave’s recent quarterly results showed both the promise and challenges facing AI infrastructure companies. Revenue growth remained strong but profitability pressures persist as the company invests heavily in expansion.
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