Gold prices edge higher on raised Fed rate cut hopes
Investing.com - Stifel downgraded CoreWeave (NASDAQ:CRWV) from Buy to Hold while raising its price target to $115.00 from $75.00 following the company’s acquisition announcement of Core Scientific. The stock, currently trading at $159.70, has shown remarkable momentum with a 299% return over the past year, according to InvestingPro data.
CoreWeave signed a definitive agreement to acquire Core Scientific (NASDAQ:CORZ) for $20.40 per diluted share through an all-stock transaction with a 0.1235 fixed exchange ratio. The deal is estimated at approximately $9 billion, though the final transaction size will be determined at closing. The transaction would significantly expand CoreWeave’s scale, with the company currently commanding a market capitalization of $76.65 billion.
The acquisition aims to transform CoreWeave into a vertical supplier of data center infrastructure for AI and high-performance computing. Post-closing, the combined entity would control approximately 1.3GW of gross power with potential for over 1GW of additional power capacity for future expansion.
Stifel cited "key near-term overhangs" as the reason for its downgrade despite acknowledging positive long-term benefits from the acquisition. This cautious stance prompted the firm to "move to the sidelines" on CoreWeave stock.
The significant price target increase from $75.00 to $115.00 reflects the potential value creation from the merger, even as Stifel expressed concerns about short-term challenges the company may face while integrating Core Scientific.
In other recent news, CoreWeave has announced its formal intent to acquire Core Scientific in an all-stock transaction valued at approximately $9 billion. This acquisition is expected to deliver significant cost savings, with projections of eliminating around $10 billion in lease overhead over the next 12 years and achieving $500 million in annual run-rate cost savings by the end of 2027. Barclays (LON:BARC) maintained an Equalweight rating on CoreWeave, noting the strategic benefits of vertically integrating data center operations. Additionally, CoreWeave has become the first AI cloud provider to deploy NVIDIA (NASDAQ:NVDA)’s GB300 NVL72 systems, which offer substantial improvements in AI infrastructure performance. The deployment was achieved in collaboration with Dell (NYSE:DELL), Switch, and Vertiv, and it enhances CoreWeave’s existing cloud platform capabilities.
The company has also been involved in discussions to acquire Core Scientific, a provider of high-performance computing and Bitcoin mining services. CoreWeave’s acquisition of Core Scientific would significantly expand its data center footprint, adding 1.3 gigawatts of gross power capacity. Macquarie reiterated its Neutral rating on CoreWeave following these developments, with a price target of $65.00. The deal is positioned to unlock more diverse financing sources and address concerns regarding CoreWeave’s debt situation. These recent developments highlight CoreWeave’s strategic focus on expanding its capabilities and optimizing its operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.