- CoreWeave Inc. (CRWV) shares jumped 8% to $38.12 in midday trading Tuesday as Jefferies and JPMorgan (JPM) initiated coverage, with Jefferies forecasting a 40% rise to $51 and JPMorgan setting a $43 target, citing strong AI compute demand.
- The Nvidia-backed AI firm, one of the largest holders of Nvidia GPUs, faced a volatile IPO in late March, anchored by Nvidia’s (NVDA) $250 million investment at $40, soaring to over $60 before dropping to $35 amid market turbulence.
- Despite concerns about its business model’s durability, CoreWeave’s early leadership in scalable AI compute positions it to capitalize on the AI infrastructure boom, though its stock’s volatility requires high investor risk tolerance.
CoreWeave Inc. (CRWV) shares surged nearly 8% to $38.12 in midday trading Tuesday, fueled by optimistic coverage from Wall Street giants Jefferies and JPMorgan (JPM), following the Nvidia-backed AI firm’s turbulent Nasdaq (^IXIC) debut in late March. Jefferies analyst Brent Thill initiated coverage with a bullish outlook, projecting a 40% rise to $51 within 12 months, citing the insatiable demand for AI compute as a buffer against concerns about the sustainability of CoreWeave’s business model. JPMorgan’s Mark Murphy, while also assigning a ‘Buy’ rating, set a more cautious $43 price target, warning of a volatile trajectory that demands high risk tolerance from investors due to the unpredictable outcomes in CoreWeave’s future.
CoreWeave’s strength lies in its vast inventory of Nvidia GPUs, positioning it as one of the largest holders of AI chips globally, with JPMorgan estimating it ranks fifth or sixth in GPU pool size. This enables the company to deliver critical computing power to Big Tech, capitalizing on the AI infrastructure boom. Thill emphasized CoreWeave’s early-mover advantage in scaling reliable AI compute, a key differentiator in a nascent but rapidly expanding market. The company’s IPO, priced at $40 with Nvidia’s (NVDA) $250 million anchor investment, raised $1.5 billion but faced challenges, opening at $39 and closing flat amid market headwinds.
Post-IPO, CoreWeave’s stock soared over 50% to above $60 before plummeting nearly half its value, exacerbated by a 9% drop on Monday to $35, as President Trump’s trade policies rattled equity markets. Despite this volatility, Wall Street’s confidence in CoreWeave’s role in the AI compute landscape underscores its potential, though its capital-intensive model and market uncertainties signal a bumpy road ahead.
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