Key Highlights
- BofA Securities maintained its Buy recommendation and $140 price objective for CoreWeave (CRWV)
- The firm increased its fiscal 2026 capital expenditure projection to $34 billion from $29 billion
- CRWV shares currently trade at $73.21, representing a 52% decline from the 52-week peak of $153.20
- BofA anticipates Q2 operating margins at 2.4%, expanding to 14.6% by the fourth quarter
- The bank argues the compute market isn’t structurally competitive, pointing to demand significantly outpacing supply
Shares of CoreWeave advanced 2.3% during pre-market trading on Sunday following Bank of America Securities’ decision to reaffirm its bullish stance on the AI cloud infrastructure provider.
CoreWeave, Inc. Class A Common Stock, CRWV
BofA kept its $140 price objective intact, despite the considerable gap between the target and current trading levels. The stock is presently valued at $73.21, marking a 52% retreat from its 52-week peak of $153.20.
Shares had declined 12% during the previous week, pressured by concerns about competitive threats from Meta and SpaceX, both reportedly entering the cloud services arena.
Bank of America also increased its fiscal 2026 capital spending projection for CoreWeave to $34 billion, up from the previous $29 billion estimate. The revision reflects evolving conditions in hardware component deployment and AI infrastructure requirements.
Regarding profitability metrics, BofA anticipates CoreWeave will deliver an operating margin of 2.4% during Q2 fiscal 2026. This forecast sits modestly below the Street’s consensus estimate of 2.8%.
However, the outlook brightens considerably as the year progresses. BofA expects margins to expand sequentially throughout the fiscal year, culminating at 14.6% in Q4, a dramatic improvement from the 1.0% recorded in Q1. This margin expansion trajectory appears to be restoring investor sentiment.
BofA analysts project a loss of $3.81 per share for fiscal 2026. Profitability is not anticipated for the company during this fiscal period.
Competitive Landscape Analysis
BofA explicitly countered the competitive pressure narrative circulating in the market. The firm rejects the characterization of the compute market as structurally competitive, maintaining that AI compute demand substantially outstrips available supply.
BofA contends that capacity availability—rather than provider preference—represents the primary constraint in today’s market environment. This perspective challenges concerns that Meta or SpaceX could substantially erode CoreWeave’s market position.
Several other research firms have expressed similar viewpoints. Wolfe Research maintained its Outperform rating alongside a $150 price target. Rosenblatt sustained a Buy rating with a $250 price objective. Evercore ISI also kept its Outperform rating at $150.
Heightened activity in call options, especially contracts expiring in August, indicates traders are establishing positions for a potential near-term recovery in the shares.
Market Context
The broader equity markets provided a favorable environment during the session. The Nasdaq climbed 0.6%, the S&P 500 increased 0.3%, and the Dow Jones advanced 0.2%. This risk-positive atmosphere typically benefits high-volatility stocks like CoreWeave.
BofA’s increased capital expenditure forecast suggests institutional analysts continue to project robust long-term demand for CoreWeave’s GPU-powered cloud infrastructure.
As additional active capacity comes online and drives revenue generation, BofA anticipates the company will demonstrate substantial operating leverage in future periods.
Later in the trading session, the stock was changing hands at $76.73, representing a 4.81% gain.
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