TLDR
- Bernstein launched coverage of CoreWeave with an underperform rating alongside a $56 price objective
- Shares closed Wednesday near $79.50 — significantly higher than Bernstein’s target
- Madison Rezaei from Bernstein expects hyperscalers to avoid signing additional major deals with CRWV
- CNBC’s Jim Cramer recommended viewers purchase NVIDIA shares rather than CoreWeave
- In January, NVIDIA made a $2 billion investment in CoreWeave, acquiring 22.9 million shares at $87.20 per share
Shares of CoreWeave experienced a 2% decline Thursday following Bernstein’s negative initiation, compounded by Jim Cramer’s statement favoring NVIDIA over the cloud computing company.
CoreWeave, Inc. Class A Common Stock, CRWV
Madison Rezaei, an analyst at Bernstein, established a $56 price objective for CRWV — representing approximately 30% downside from Wednesday’s closing price of $79.50.
While Rezaei recognized that CoreWeave has successfully leveraged the surging demand for GPU computing infrastructure, questions remain about the company’s future prospects.
“With a plethora of options, we do not believe hyperscalers will be incentivized to sign further large contracts with CRWV,” Rezaei wrote.
The bearish thesis centers on a simple premise: major cloud infrastructure giants such as AWS, Microsoft Azure, and Google Cloud are increasingly likely to develop their own competing solutions rather than continue outsourcing to CoreWeave.
“Hyperscalers are more likely to attempt head-on competition, going after GPU cloud business as the natural adjacency to traditional cloud, and cannibalizing CRWV’s market,” Rezaei added.
Rezaei also noted that as overall compute capacity constraints ease across the market, CoreWeave may face heightened competitive threats from these larger cloud infrastructure providers.
The timing of Bernstein’s report proved challenging for CRWV, as the stock was already experiencing downward pressure amid broader technology sector volatility.
Jim Cramer Weighs In
During Thursday’s broadcast, a viewer contacted Cramer’s program inquiring whether CoreWeave’s recent price decline presented an attractive entry point.
Cramer expressed skepticism. “Man, you are going into the lion’s den,” he said. “I’d rather have you buy NVIDIA.”
He referenced multiple favorable catalysts for NVIDIA that emerged during the previous 72 hours as justification for his preference toward the semiconductor leader.
Cramer also reminded his audience about a significant chapter in CoreWeave’s narrative. On January 26, he emphasized that NVIDIA had committed an additional $2 billion to CoreWeave, acquiring 22.9 million shares at $87.20 apiece.
At the time, Cramer called it “a fantastic verification for CoreWeave,” describing the company as NVIDIA’s preferred chip distribution partner for customers who can’t get direct GPU allocations.
NVIDIA’s $2 Billion Bet
NVIDIA’s substantial investment continues to be a focal point in CoreWeave’s investment thesis.
CEO Jensen Huang joined CNBC’s Squawk on the Street alongside CoreWeave’s CEO Michael Intrator to address the transaction.
The capital infusion demonstrated that CoreWeave occupies a strategic position within the AI infrastructure ecosystem — serving as a distribution channel enabling NVIDIA chips to reach end users who lack direct access.
However, Bernstein’s analysis suggests this competitive edge could diminish as market dynamics evolve.
CRWV shares retreated 2% Thursday amid widespread selling pressure across technology equities. With Wednesday’s close at $79.50, Bernstein’s $56 price target implies approximately 30% downside potential from current levels.
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