Nvidia-backed CoreWeave gets largely bullish coverage from brokerages

Time of India

22-04-2025

By Joel Jose and Siddarth S
Wall Street brokerages on Tuesday began coverage of Nvidia-backed
CoreWeave
with broadly bullish views, although the stock has failed to gain traction with investors following a lackluster initial public offering and market debut.
Among the five major brokerages covering CoreWeave's shares,
Goldman Sachs
set the highest price target at $54, while J.P.Morgan had the lowest at $43.
The stock, which was priced at $40 in its IPO, is currently trading at $36.25.
After the expiration of the industry-required quiet period, the brokerages started coverage of the stock, citing the company's strong foothold in the booming
AI infrastructure
market for their bullish stance.
"CoreWeave exhibits a track record of being first to deploy next-gen GPUs, making it difficult for other hyperscalers to claim industry leadership," J.P.Morgan said.
Livingston, New Jersey-based CoreWeave offers access to data centers and high-powered
Nvidia
chips, which are highly coveted in the competitive AI development landscape. However, they also expressed caution about its over-reliance on some of its customers and a tough market backdrop.
"Volatile macro (and equities) backdrop may limit investors' willingness," said Morgan Stanley, as it started coverage with an "equal-weight" rating.
Last year, CoreWeave - whose 32 data centers house over 250,000 GPUs, mainly supplied by Nvidia - generated 77% of its revenue from just its top two clients, one of which was
Microsoft
. Ahead of its IPO, CoreWeave inked a blockbuster $11.9 billion, five-year deal with
OpenAI
, Reuters reported last month, forging an alliance with the industry's top startup.
"Close relationship with Microsoft and OpenAI could cut both ways ... and the customer concentration here does pose a risk," Barclays said.
"We expect the stock to provide a wild, lumpy, volatile ride, requiring a risk tolerance that may not exist for most investors," J.P.Morgan said, warning that the firm's debt-fueled, capital-intensive business could pose risks.
The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, J.P.Morgan and Goldman Sachs and was seen as a pivotal gauge of investor enthusiasm for new listings and AI-related stocks, especially in light of China's DeepSeek launch.