Cigna earnings beat by $0.04, revenue topped estimates
Tuesday, CoreWeave, a leading provider of GPU-as-a-service with a market capitalization of $16.4 billion, received a Buy rating from Stifel analysts, who set a price target of $55.00 for the company’s shares. Currently trading at $35.42, near its 52-week low of $33.52, InvestingPro analysis suggests the stock is undervalued. The new coverage highlights CoreWeave’s position in the rapidly expanding market for AI compute infrastructure.
CoreWeave operates approximately 32 data centers worldwide, boasting over 250,000 GPUs supported by more than 360MW of active power. The company has also planned for contracted deployment of future infrastructure. Stifel’s analysis anticipates CoreWeave’s net property, plant, and equipment (PP&E) to surpass $40 billion by fiscal year 2027, a figure that is notable even when compared to the $60-80 billion capital expenditure forecasted for the big four cloud service providers (CSPs) in fiscal year 2025.
Despite facing challenges such as debt, depreciation and amortization overhangs, and the need to scale infrastructure—which are reflected in a pressured multiple—Stifel believes CoreWeave’s ongoing execution will enable it to gain a larger market share. The company’s targeted management of assets is expected to yield roughly 20% improvement in machine function utilization (MFU) at scale.
Stifel analysts are confident in CoreWeave’s ability to enhance its balance sheet and generate positive free cash flow (FCF) within approximately five years. This financial progress, according to the analysts, should lead to an expansion of the company’s stock multiple. The endorsement comes as CoreWeave continues to solidify its presence in a critical sector that is experiencing exponential growth.
In other recent news, CoreWeave has been making headlines with several significant developments. Jefferies initiated coverage on CoreWeave, issuing a Buy rating and setting a price target of $51. The firm emphasized CoreWeave’s strong position in the AI compute market, citing its ability to scale and host resources reliably. In another development, CoreWeave is reportedly in advanced talks with Google (NASDAQ:GOOGL) to lease Nvidia (NASDAQ:NVDA) AI chips, highlighting the company’s strategic role in addressing the growing demand for AI capabilities. This potential agreement underscores the challenges faced by major Nvidia customers in securing sufficient chip supplies.
Additionally, CoreWeave has adjusted its US initial public offering, reducing the size to approximately $1.5 billion. The company plans to offer around 37.5 million shares at $40 each, a revision from the original terms. This move comes amidst a backdrop of interest from major AI developers and cloud services, including OpenAI and Meta Platforms (NASDAQ:META). The ongoing demand for Nvidia GPUs further emphasizes the importance of CoreWeave’s position in the market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.