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Investing.com - Mizuho (NYSE:MFG) downgraded CoreWeave (NASDAQ:CRWV) from Outperform to Neutral on Tuesday while simultaneously raising its price target to $150.00 from $70.00. According to InvestingPro data, the company currently trades at significant premium multiples, with an EV/EBITDA ratio of 58.7x.
The rating change follows CoreWeave’s Monday announcement that it agreed to acquire Core Scientific (NASDAQ:CORZ) for approximately $9 billion in an all-stock transaction. The deal would combine two significant players in the AI infrastructure space, with CoreWeave’s current market capitalization standing at $76.7 billion.
Mizuho views the acquisition positively, noting it allows CoreWeave to "verticalize the infrastructure supply chain while driving significant cost synergies and enabling more financing flexibility."
Despite the favorable assessment of the deal, Mizuho considers CoreWeave’s risk/reward profile as "balanced" following a 300% stock price increase since its IPO just three months ago.
The substantial price target increase reflects recent appreciation in comparable company multiples, growing demand for AI infrastructure, and what Mizuho describes as "a means of efficiently acquiring additional capacity at scale" through the Core Scientific acquisition.
In other recent news, CoreWeave announced its intention to acquire Core Scientific in an all-stock transaction valued at approximately $9 billion. This acquisition is expected to deliver significant cost savings, including an estimated $10 billion in lease overhead reductions over the next 12 years and $500 million in annual run rate cost savings by the end of 2027. Stifel downgraded CoreWeave from Buy to Hold, citing near-term challenges despite recognizing potential long-term benefits, and raised its price target from $75.00 to $115.00. Macquarie maintained a Neutral rating with a $65.00 price target, noting the transaction could be 5% accretive to earnings per share based on projected savings. Barclays (LON:BARC) also kept an Equalweight rating with a $100 price target, highlighting the deal’s potential to enhance CoreWeave’s data center operations. Additionally, CoreWeave became the first to deploy NVIDIA (NASDAQ:NVDA) GB300 NVL72 systems, promising significant improvements in AI infrastructure performance. This deployment was achieved in collaboration with Dell (NYSE:DELL), Switch, and Vertiv, showcasing CoreWeave’s commitment to advancing AI capabilities.
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