Shares of CoreWeave (CRWV 2.56%) rallied Tuesday morning, gaining as much as 13.7%. As of 11:51 a.m. ET, the stock was still up 12.7%.
The catalyst that sent the artificial intelligence (AI) and neocloud specialist higher was a couple of bullish takes from Wall Street analysts.
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Feeling the love
In a regulatory filing yesterday, Nvidia revealed it had nearly doubled its investment in CoreWeave to more than 47 million shares, in a stake valued at $4.6 billion as of Monday's close. That amounts to an 11.5% stake in the company and represents 90% of Nvidia's equity portfolio. On the heels of that revelation, Wall Street is weighing in.
First, D.A. Davidson analyst Alex Platt upgraded CoreWeave to buy from neutral (hold), while raising his price target from $68 to $100, representing potential upside of about 2%. The analyst was playing catch-up after CoreWeave rallied 7% in yesterday's trading on the Nvidia news.
After being skeptical of the stock, the analyst writes, "We find it hard to believe that Nvidia would not only increase their common stock position in CoreWeave but also agree to a backstop arrangement in a 5-gigawatt (GW) buildout plan if they too didn't believe OpenAI raises enough capital to fulfill their near-term commitments to CoreWeave."
Not to be outdone, Deutsche Bank analyst Brad Zelnick upgraded CoreWeave to buy from hold, raising his price target to $140 from $100, representing potential upside of 42%. The analyst cited its strategic partnership with Nvidia -- which gives CoreWeave access to Nvidia's latest AI chips -- and the acceleration of CoreWeave's path to 5GW as reasons for his bullish call.
NASDAQ: CRWV
Key Data Points
Is the stock a buy?
CoreWeave is growing like wildfire, and while the company is closing in on profitability, it isn't there yet. In Q3, revenue of $1.36 billion soared 134% year over year, while it slashed its loss per share to $0.22, down 88%. At 10 times sales, it's still pricey, but the opportunity is vast.
CoreWeave stock is beginning to look intriguing.
