CoreWeave Stock Rally Faces Challenges: Wall Street Analyst Predictions

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ago 2 hours

CoreWeave Stock Rally Faces Challenges: Wall Street Analyst Predictions

CoreWeave (CRWV), a prominent player in AI cloud infrastructure, recently faced a significant stock decline of nearly 30% over five trading sessions. This pullback followed an announcement regarding a reduced revenue forecast for 2025 during its latest earnings call. Despite reporting robust financial results, CoreWeave now anticipates revenues of $5.1 billion for 2025, a drop from an earlier estimate of $5.25 billion. The revision is attributed to delays at a key data center and challenges related to compute supply.

Stock Performance and Market Outlook

Year-to-date, CoreWeave’s shares have risen by over 108%, driven by the strong demand for AI computing and new long-term contracts with major technology clients. Although there is some caution among analysts regarding short-term performance, the long-term outlook remains optimistic.

Analyst Predictions for CoreWeave Stock

Following the recent developments, Wall Street analysts shared diverging views on CoreWeave’s prospects. Michael Donovan from Compass Point initiated coverage with a “Buy” rating and set a price target of $150. Donovan notes that despite CoreWeave’s public debut in March 2025, the company has already secured significant long-term demand, boasting a backlog of $55.6 billion in the third quarter, an increase of 85% from the previous quarter.

Key contracts include:
- $22.4 billion deal with OpenAI
- $14.2 billion contract with Meta (META) extending through 2031

Additionally, Donovan highlighted Nvidia’s (NVDA) ownership of about 7% in CoreWeave and a capacity guarantee worth $6.3 billion. This arrangement ensures the company can generate revenue from unused GPUs until 2032, further enhancing growth potential.

Financial Challenges and Cautions

Conversely, J.P. Morgan analyst Mark Murphy adopted a more cautious stance, downgrading his rating from “Buy” to “Hold” while maintaining a $110 price target, suggesting limited upside from present levels. Murphy noted certain projects faced delays due to supply chain constraints, impacting revenue expectations.

Despite these challenges, CoreWeave continues to attract new clients such as CrowdStrike (CRWD), Rakuten, Poolside, and Jasper, reaffirming the ongoing demand for AI cloud services.