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Tuesday, Barclays (LON:BARC) began coverage on CoreWeave (NASDAQ:CRWV) shares, assigning an Overweight rating and setting a price target of $48.00. CoreWeave, recognized as the first publicly traded U.S. company focused exclusively on genAI optimized Infrastructure-as-a-Service (IaaS), is now under the spotlight for its potential in a burgeoning market. According to InvestingPro analysis, the stock appears undervalued at current levels, trading at $35.42.
The analyst from Barclays highlighted the substantial total addressable market (TAM), which is approximately $399 billion for Training and Inference, and CoreWeave’s impressive projected revenue compound annual growth rate (CAGR) of 68% from 2024 to 2027. This growth outlook is supported by the company’s remarkable revenue growth of 737% in the last twelve months and strong gross profit margin of 74%, according to financial data from InvestingPro.
Barclays’ coverage notes that while there are unique aspects to investing in emerging market segments—such as significant depreciation from high capital expenditures and the financing of new projects with debt—these factors are part of the evolving landscape for Tech investors. The analyst believes that as investors become more familiar with these characteristics, they will recognize the opportunities they present. InvestingPro data reveals several important insights about the company’s financial health, including its rapid cash burn rate and high growth potential, with 13 additional ProTips available to subscribers.
CoreWeave’s strategic advantage is also attributed to its timely market entry and its close partnership with Nvidia (NASDAQ:NVDA), a relationship that is expected to support CoreWeave’s success in the competitive field. Barclays sees the current stock levels as an attractive entry point for investors looking to capitalize on CoreWeave’s market position.
The coverage by Barclays underscores the potential for CoreWeave to become a key player in the genAI optimized IaaS industry, driven by its growth prospects and strategic partnerships. Investors are now watching CoreWeave as it navigates this emerging and high-growth market space.
In other recent news, CoreWeave has been the subject of multiple analyst ratings and significant corporate developments. CoreWeave’s recent US initial public offering (IPO) has been adjusted to approximately $1.5 billion, with plans to offer around 37.5 million shares at $40 each, a reduction from the initial proposal. The company has seen interest from major players like Google (NASDAQ:GOOGL), which is reportedly in talks to lease Nvidia AI chips from CoreWeave to meet growing demands for AI applications. Analysts from Stifel have initiated coverage of CoreWeave with a Buy rating and a $55 price target, emphasizing the company’s strong position in the AI compute infrastructure market. Jefferies also issued a Buy rating, setting a $51 price target, and highlighting CoreWeave’s ability to scale AI compute resources. Morgan Stanley (NYSE:MS) rated the stock as Equalweight with a $46 price target, noting both growth potential and risks such as high debt and customer concentration. These developments underscore CoreWeave’s strategic moves and the interest it garners from significant industry players.
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