Nvidia-backed CoreWeave gets largely bullish coverage from brokerages
By Joel Jose and Siddarth S
(Reuters) - 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.
Following are the ratings and price targets for CoreWeave from some of the major brokerages:
Brokerage Rating Price Target
Jefferies Buy $51
J.P.Morgan Overweight $43
Barclays Overweight $48
Morgan Stanley Equal-weight $46
Goldman Sachs Neutral $54
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