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Investing.com - Macquarie has reiterated its Neutral rating and $65.00 price target on CoreWeave (NASDAQ:CRWV) following the company’s acquisition of Core Scientific. According to InvestingPro data, CoreWeave currently trades at high valuation multiples across revenue and EBITDA, with a market capitalization of $79.29 billion.
The deal significantly expands CoreWeave’s data center footprint, giving it ownership of approximately 1.3 gigawatts of gross power across Core Scientific’s U.S. data center network. This includes about 840 megawatts allocated to high-performance computing contracts and roughly 500 megawatts dedicated to crypto mining capacity. The company’s strong gross margin of 74.28% suggests efficient operations, though InvestingPro analysis indicates its current ratio of 0.44 may present liquidity challenges.
CoreWeave expects the vertical integration to enhance operating efficiency while reducing infrastructure conversion risks and addressing growth needs. Management anticipates financial efficiencies through streamlined business operations and elimination of lease costs, projecting over $10 billion in savings over the next 12 years and an estimated $500 million in fully-ramped annual run-rate cost savings by the end of 2027. Discover 16 additional key insights about CoreWeave with an InvestingPro subscription, including detailed valuation metrics and growth forecasts.
The acquisition also opens possibilities for CoreWeave to repurpose crypto capacity for high-performance computing or potentially divest it. The deal is positioned to unlock more diverse financing sources at more favorable capital costs, addressing recent concerns about CoreWeave’s debt situation.
Macquarie’s analysis suggests the transaction could be approximately 5% accretive to earnings per share based on projected net annual savings, not including additional capacity use-cases or potential gains from divestments.
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 yield significant cost savings, eliminating around $10 billion in lease overhead over the next 12 years and resulting in $500 million in annual cost savings by 2027. Barclays (LON:BARC) maintained an Equalweight rating on CoreWeave following the announcement, suggesting the deal is a logical step in the company’s development. 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. This deployment was achieved in collaboration with partners like Dell (NYSE:DELL) and Vertiv and enhances CoreWeave’s existing cloud services. Furthermore, CoreWeave introduced three new AI cloud software products, including Mission Control Integration and W&B Inference, aimed at improving AI development and deployment efficiency. These developments follow CoreWeave’s acquisition of the AI developer platform Weights & Biases earlier this year. The company’s efforts continue to solidify its position in the AI cloud market, as evidenced by its inclusion in the TIME100 and Forbes Cloud 100 rankings.
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