CoreWeave Stock Skyrockets: Here’s What Bank of America Predicts Next

CoreWeave (NASDAQ:CRWV) stock is jumping nearly 20% today, hitting a fresh all-time high and extending a huge 145% rally this month. The surge comes as Wall Street piles into one of the hottest AI infrastructure plays, with CoreWeave gaining momentum from explosive demand and Nvidia’s backing.

In its first earnings report since going public, the cloud upstart reported a whopping 420% year-over-year revenue increase to $981.6 million, driven by surging demand for its AI-optimized cloud infrastructure powered by Nvidia chips.

Despite this impressive growth, CoreWeave reported an adjusted net loss of $149.6 million, widening from last year’s $23.6 million loss. The company attributes this to aggressive scaling efforts to meet increasing AI industry demands, including plans to spend $20 billion to $23 billion in capital expenditures this year.

CoreWeave has expanded its operations, now running 33 data centers across the US and Europe, funded by $12.9 billion in debt largely secured by over 250,000 Nvidia GPUs. Significant developments include an $11.2 billion deal with OpenAI and a $1.7 billion acquisition of Weights & Biases.

Adding to the momentum, Nvidia disclosed a significant increase in its stake in CoreWeave, now holding approximately a 5% stake in the company.

While some analysts express concern over the company’s heavy upfront investments and mounting debt, others see CoreWeave’s strategic positioning and partnerships as a strong foundation for future growth in the AI infrastructure market.

Among the bulls is Bank of America analyst Brad Sills, who points to CoreWeave’s strong execution and improving capital efficiency as key differentiators in a competitive field.

“In summary, Q1 results validate that CoreWeave is well positioned to capitalize on the rapidly growing AI infrastructure industry, as the best of breed data center provider. While this is a capital-intensive business, expanding return on net assets suggests a widening spread with costs of capital. We reiterate our Buy rating and raise our PO from $42 to $76 for revenue upside. Our new PO is based on a forward 16x C27e EBIT based on CY27 EV (13x prior), a premium to the cloud datacenter group at 15x for long runway of EBIT growth,” Sills noted. (To watch Sills’ track record, click here)

Overall, CRWV gets a Moderate Buy consensus rating from the Street, based on 12 recent analyst reviews that include 7 Buys and 5 Holds. (See CRWV stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.