CoreWeave (CRWV) Drops as HSBC Turns Bearish
CoreWeave dropped by 7.57 percent on Thursday to close at $132.21 apiece as investors disposed of shares following an investment firm's pessimistic outlook for the company.
In a market note, CoreWeave, Inc. (NASDAQ:CRWV) earned a 'reduce' rating and a meager $32 price target from HSBC Global Research, marking a 76-percent downside from its latest closing price.
According to HSBC, the rating revision was based on CoreWeave, Inc.'s (NASDAQ:CRWV) overreliance on Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA).
However, it noted that such clients have not adopted CoreWeave, Inc.'s (NASDAQ:CRWV) software services, weakening the company's competitiveness and customer stickiness.
'Selling more value-added services driven by the software stack, as is done by general-purpose clouds, may be key to achieving stronger returns,' the market note said.
A close-up of a businesswoman using a laptop, being illuminated by the AI-enabled cloud interface sponsored by the company.
'But CoreWeave would first need to successfully shift to a general-purpose cloud offering and diversify away from Microsoft and Open AI (which together accounted for more than 72% of its revenue and most of its backlog in 1Q25) towards customers that require CoreWeave's full software stack.'
While we acknowledge the potential of CRWV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the .
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.
Disclosure: None. This article is originally published at Insider Monkey.
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