Oracle introduces AI Factory service to support business AI adoption
Investing.com -- Citizens upgraded CoreWeave to Market outperform, saying the surge in demand for outsourced computing power from hyperscale customers should fuel growth in the GPU-as-a-service market despite lingering structural risks.
The brokerage set a $180 price target on the stock, saying the company is well positioned as large cloud providers increasingly rent GPU clusters instead of building them in-house.
Outsourcing is accelerating faster than expected, with Oracle’s blowout $455 billion backlog and reports of a $17 billion Microsoft contract with rival Nebius.
The firm now estimates the GPUaaS market could expand from just $3-4 billion today to as much as $300 billion by 2030, with CoreWeave among the key beneficiaries.
CoreWeave had an agreement with Nvidia for $6.3 billion for master service, under which Nvidia agreed to buy unused capacity, further boosts visibility on demand.
CoreWeave’s shares have slumped about 30% since its second earnings report on concerns over margin compression in the second half of 2025.
Citizens said investor sensitivity remains high but believes the scale of new outsourcing deals should outweigh near-term pressure.
Analysts cautioned that longer-term issues remain, including pricing pressure as contracts mature and the risk of the GPUaaS market eventually resembling the commoditized content delivery network business. But the immediate upside from hyperscale demand is too strong to ignore.
“Despite what we believe to be obvious disconnects with investors, we think the volume of the business available will allow the company to reset expectations with investors,” analysts at Citizens said.
CoreWeave’s software-light model is often misunderstood, analysts added.