Latest news with #GreggMoskowitz
Yahoo
2 days ago
- Business
- Yahoo
Two months after CoreWeave's IPO fizzled, the AI company has surged 250% and left doubters baffled
On Monday, data center company Applied Digital announced two 15-year lease agreements with CoreWeave, an AI infrastructure company. The news sent CoreWeave's stock soaring by more than 40% over the next few days. Such double digit percentage gains have become par for the course during CoreWeave's brief life as a publicly traded stock. On May 27, the stock jumped over 20% after the company announced $2 billion in senior notes, and on May 16 it popped 22% on news that Nvidia infused it with a $900 million investment. The stock tumbled 17% on Thursday, but was back up 4% in midday trading on Friday. Even for a high beta stock, the overall trendline is overwhelmingly positive: Coreweave's stock is up a whopping 250% since its March IPO, with the company's market cap now roughly $70 billion. This has baffled many Wall Street analysts who believe the company is in a precarious financial situation despite the explosive revenue growth logged on its top line. 'Nothing from a fundamental perspective would support the magnitude of change that we've seen in the stock since the IPO,' says Nick Del Deo, a managing director at MoffettNathanson who covers CoreWeave and other tech companies. Of the 19 analysts who cover the company, just three had a 'buy' rating on the stock and four others had positive opinions while the consensus rating is firmly 'hold' as of June 6. The average price target among all analysts who cover the stock is $72.61, well below the $145 level Coreweave was trading at on Friday and the 52-week high of $166.63. Some analysts believe the demand for the stock is being driven by retail investors who, on average, engage in contrarian and momentum-driven trading and may be eager to invest in CoreWeave due to its multi-billion dollar contracts with Nvidia, OpenAI, Microsoft and other major companies propelling AI. It's worth noting that institutional investors like Coatue Management and Jane Street do hold CoreWeave positions worth over $1 billion each. Big announcements like the Applied Digital leases are one factor driving up shares of the stock. An even more fundamental dynamic is that investors are looking for ways to capitalize on the success of OpenAI, which is privately held, and see CoreWeave as one of the few vehicles for exposure in the public markets. OpenAI owns a percentage of CoreWeave and signed a multi-billion deal as its cloud infrastructure provider until April 2029. Plus, CoreWeave is a preferred partner of Nvidia, currently the most valuable company in the world by market cap, which is also an investor in CoreWeave. CoreWeave 'is positioned to capture meaningful share of an AI cloud provider market growing at a server-melting pace,' wrote Mizuho's Gregg Moskowitz, who has an 'outperform' rating on the stock, in a note after the company's released its quarterly earnings report in mid-May. In the first quarter, CoreWeave beat revenue estimates by over 10% and forecasted second-quarter above consensus predictions, too, per Yahoo Finance. Moskowitz and the other optimistic CoreWeave analysts did not respond to Fortune requests for comment. Coreweave posted revenue of $981.6 million in the first three months of the year, up a staggering 420% from the year-ago period. The meteoric growth reflects Coreweave's well-timed pivot to AI. Founded in 2017 by three commodity traders, Coreweave began as an ethereum mining company. In 2019 it pivoted to cloud infrastructure to enhance GPU capabilities, attracting investment and chips from Nvidia–beginning its journey to the upper echelons of AI computing. The company's public market debut was not auspicious. Coreweave reduced the price range of the offering, and the stock finished its first day trading just one penny above its $40 IPO price. For analysts skeptical about CoreWeave's value, their dim view is driven by the company's debt-saddled balance sheet, its ultra-dependence on Microsoft, and customers' development of proprietary technologies to replace contracts with the cloud computing company. The bullishness of day traders and bearishness of investment professionals may be creating a short squeeze situation similar to the GameStop one that rocked markets in 2021 by causing the stock to go from $17 to $483 over the course of a month. The volatility of the CoreWeave in this instance is amplified by its low float—meaning that only a small amount of shares are available for purchase. It would make sense that CoreWeave could be a short squeeze target: short interest is approximately 8.44% of its float, well above the 2% to 5% average across U.S. stocks, though still far below the 140% of GameStop near the onset of its famous squeeze. One Coreweave short seller experiencing the squeeze is Felix Wang, a managing director and partner at Hedgeye Risk Management. Yet, Wang maintains his short position despite facing potentially enormous losses. His argument is multifaceted but boils down to the company's net debt, lease liabilities and its dependence on Microsoft and a tiny handful of others for the bulk of its revenues. 'Investors should be more concerned about their operating and financial obligations,' he tells Fortune. This is because the company has a 387% debt-to-equity ratio, -38.7% profit margin and $11.9 billion debt with just $1.28 billion in cash. These fundamentals combined with the fact that Microsoft accounted for over 70% of CoreWeave's revenue last quarter leads Wang to compare CoreWeave to WeWork at the time of its failed 2019 IPO. Wang looks at CoreWeave's creditors Blackstone and Magnetar Financial. He says that these lenders are currently charging CoreWeave 10% to 15% interest on its debt and will have provisions to charge higher interest and accelerate the repayment schedule if CoreWeave's clients like Microsoft end or downgrade partnerships with the cloud provider. 'If your customers are the most highly-rated AAA clients in the world, other than OpenAI, then why are you paying 10% to 15% interest by yield on your debt agreements?' ask Wangs. CoreWeave's debt obligations have, in-part, led D.A. Davidson Head of Research Gil Luria to rate the stock as an underperformer. He explains that CoreWeave's debt obligations are so large that equity holders own a very little portion of the company. Plus, CoreWeave customers Microsoft and Google are building products to directly compete with it, he says. 'The only reason that they're using CoreWeave is that CoreWeave was able to build quickly enough while Microsoft and Google weren't getting enough chips from Nvidia,' leading them to ink three- or five-year deals with CoreWeave, he says. 'Their need for CoreWeave will go away within the life of the contract.' These incredulous analysts may be vindicated in September when the lockup period on the IPO expires in September and restricted shareholders can offload their CoreWeave holdings and the stock price will drop. But as CoreWeave's stock bounced back Friday after plunging 17% on Thursday, perhaps the only thing that's clear is that the AI company will continue to leave believers, and skeptics, scratching their heads. This story was originally featured on
Yahoo
17-05-2025
- Business
- Yahoo
Why CrowdStrike Holdings Stock Sank on a Positive Thursday for the Market
An analyst downgraded his recommendation on the popular cybersecurity company. There were also some questions about a large-scale transfer of shares by founder and CEO George Kurtz. 10 stocks we like better than CrowdStrike › Investors weren't feeling entirely secure about cybersecurity stock CrowdStrike Holdings (NASDAQ: CRWD) on Thursday. Largely on the back of an analyst's recommendation downgrade, they traded out of the company, leaving it with a nearly 1% decline in price that day. That didn't look great when contrasted with the S&P 500's (SNPINDEX: ^GSPC) 0.4% gain. The person responsible for the downgrade was Gregg Moskowitz of Mizuho, who changed his view on CrowdStrike stock to neutral from his previous outperform (buy, in other words). His price target on the cybersecurity company is $425 per share. According to reports, Moskowitz once flagged CrowdStrike as being one of his firm's favorite stocks. He still feels it might have a good future, as in his position it remains well situated for future growth. However, he feels that the company is now operating in a more risky environment, among other negative factors, and the stock's current popularity does not reflect this. Moskowitz's move came days after the stock's most recent catalyst: a large transaction in company shares by CrowdStrike founder and CEO George Kurtz. The executive disclosed that he had gifted more than $1 billion in company stock, shrinking his voting power to 2.5% — as recently as 2022, he held 31%. Thursday afternoon, in a post on LinkedIn, Kurtz addressed this, saying that he "moved some stock into trusts for my family, as well as to support causes we care about, like teenage mental health." Kurtz also quashed rumors about his impending departure from CrowdStrike, writing that "for those suggesting I'm riding off into the sunset... not a chance." CrowdStrike certainly is expensive, both in terms of its price and its valuations. Yet it's a much-admired company whose technology gets consistently high marks by users and cybersecurity experts. To me, this is a case of paying a premium for quality, and I'd be more bullish than Moskovitz on the stock. Before you buy stock in CrowdStrike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CrowdStrike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,511!* Now, it's worth noting Stock Advisor's total average return is 959% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy. Why CrowdStrike Holdings Stock Sank on a Positive Thursday for the Market was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24-04-2025
- Business
- Yahoo
Mizuho Is Bullish on Microsoft's (MSFT) Cloud Businesses
Microsoft's (MSFT) cloud-infrastructure unit, Azure, is well-positioned to deliver " over the long term, Gregg Moskowitz, an analyst at Japanese bank Mizuho, wrote recently. Moskowitz has a $475 price target and an Outperform rating on MSFT. A development team working together to create the next version of Windows. Azure and Microsoft 365 Are Seen as Positive Catalysts for MSFT Azure should benefit from "public/hybrid cloud migration, (the) digital transformation of complex workflows, Moskowitz believes. Meanwhile, Microsoft 365, the cloud-powered version of Office, is very widely used by companies and government agencies, the analyst reported. Moreover, the cloud-powered product's average revenue per user is likely to rise going forward, according to Moskowitz. Other Positive Drivers for MSFT Moskowitz is impressed by MSFT's progress on the GenAI front, and he sees the company as better able to exploit the technology than any other software vendor. Finally, the Street is underestimating the tech giant's long-term, revenue-growth outlook, and the firm is likely to keep its costs under control, according to the analyst. The Recent Price Action of MSFT Stock In the last month, the shares have dropped 7%, while they are down 15% in the last three months. In the last month, the shares have dropped 12%, while they have given back 17% in the last three months. While we acknowledge the potential of MSFT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
22-04-2025
- Business
- Yahoo
Mizuho Tells Investors to Unload Palantir (PLTR) Stock, Citing Valuation
Palantir's (PLTR) "high multiple" is "very difficult to justify," Gregg Moskowitz, an analyst at Japanese bank Mizuho, wrote recently. The analyst believes that investors should sell PLTR. He placed an $89 price target on the shares. PLTR Stock Bakes in a Great Deal of Success, Mizuho Says The huge valuation of the shares already anticipates a "material acceleration" of the company's revenue growth, according to Mizuho. The stock is also baking in financial results that exceed analysts' average estimates, Moskowitz contended. PLTR is changing hands for 173 times analysts' average 2025 earnings per share estimate. The Positive Aspects of PLTR Palantir is likely to beat analysts' average top-line estimates, and the name definitely does deserve "a premium valuation," according to Moskowitz. What's more, AI adoption in America is likely to be "strong," the analyst believes. Since Palantir is helping companies implement AI, it will probably benefit from the latter trend. The Recent Price Action of PLTR Stock In the last month, the shares have fallen 2%, but they are up 29% in the last three months, and they have soared 335% in the last 12 months. While we acknowledge the potential of PLTR, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
14-03-2025
- Business
- Yahoo
Rubrik Soars 22% as Strong Earnings Fuel Wall Street Optimism
Rubrik (NYSE:RBRK) jumped 22% to $67.43 as of 10:14 AM ET Friday, after the cybersecurity company reported better-than-expected quarterly results and guidance, drawing praise from Wall Street. Mizuho analyst Gregg Moskowitz noted that Rubrik outperformed estimates, largely due to strong subscription growth. He highlighted the company's ransomware defenses and data security focus as key differentiators, maintaining an Outperform rating while slightly lowering the price target to $75 from $82 amid broader market valuation pressures. Wedbush Securities raised its price target to $80 from $75, citing Rubrik's strong R&D investments and growing market opportunity. Warning! GuruFocus has detected 3 Warning Signs with RBRK. The firm noted that Rubrik's fiscal 2026 earnings per share guidance of ($1.23) to ($1.13) exceeded consensus expectations of ($1.25), while its free cash flow guidance of $45M to $65M signals disciplined investment. Analysts see Rubrik in the early stages of a high-growth cycle, with the cyber resilience market projected to reach $53 billion by 2027. Shares of other cybersecurity firms, including Palo Alto Networks (NASDAQ:PANW), CyberArk (NASDAQ:CYBR), and CrowdStrike (NASDAQ:CRWD), also gained in response. This article first appeared on GuruFocus. Sign in to access your portfolio
