CoreWeave Gears Up For AI Growth, But Debt Concerns May Jolt Stock, Says Analyst

Needham analyst Mike Cikos reiterated the Buy rating on CoreWeave, Inc CRWV on Thursday, with a price forecast of $55.

The company reported its first quarterly results as a public company late Wednesday.

CoreWeave said first-quarter revenue increased 420% year-over-year to $981.63 million, beating analyst estimates of $859.77 million. The Nvidia-backed AI infrastructure company reported an adjusted loss of approximately 60 cents per share.

Cikos noted that CoreWeave's earnings highlighted a significant market opportunity and solid execution. Revenue surpassed expectations by 15%, and second-quarter guidance came in 9% above consensus at the midpoint.

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Cikos added that full-year revenue guidance was raised by 7%—fully incorporating the first-quarter beat, the second-quarter raise, and an implied increase for the second half of the year.

The analyst observed growing enterprise AI adoption, reflected in rising inference demand, which has encouraged management to accelerate investment, as data center capacity expanded from 1.3GW to 1.6GW.

While Cikos sees some stock volatility as investors digest the debt implications tied to funding CapEx, the analyst highlighted that CoreWeave has excelled in securing GPUs and assembling data center infrastructure in a highly constrained power environment, enabling it to gain market share amid soaring demand for AI compute.

He emphasized the company's bold and effective strategy for securing data center power—now at 360 active megawatts with over 1.3GW under contract—driven by flexible partnerships and innovative financing, including upfront CapEx to accelerate deployment timelines.

Cikos writes that the market may be underestimating the longevity of CoreWeave's infrastructure returns, noting that while GPUs are depreciated over six years, management sees a cash payback period of roughly 2.5 years and average contract durations of around four years.

The analyst added that the company could potentially realize value from its infrastructure well beyond the initial contract terms.

Price Action: CRWV shares are trading higher by 5.08% to $70.89 at last check Thursday.

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