This AI play gets two price target increases ahead of earnings
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CoreWeave still looks attractive despite its recent rally, particularly as the company prepares to update investors on its pipeline of multibillion-dollar deals with its first-quarter earnings report later this week, according to two firms on Wall Street. Bank of America, which has a buy rating on the cloud-computing name, raised its price objective on shares to $140 from $120. That new target suggests nearly 12% upside from Monday's close. Jefferies also raised its price target on shares to $160 from $120, implying 28% upside from their closing price on Monday. The firm also has a buy rating on the stock. "CRWV is set for a major [remaining performance obligation] step-up after announcing 3 deals in [April]," Jefferies analyst Brent Thill said in a note, referring to the company's deals with Meta, Anthropic and Jane Street announced last month. "Consistent execution on [revenue], [margins] & active power is key to restoring [long-term] conviction in targets. Our checks reinforce unrelenting AI compute demand & CRWV's edge in hosting increasingly complex workloads," he added. CRWV YTD mountain CRWV year to date Shares have jumped 75% in the year to date as hyperscalers seek out cloud-computing services for their artificial intelligence-focused data centers. Amid the surge, CoreWeave has built up a pipeline of commitments worth more than $95 billion, which includes a $21 billion agreement with Meta and a $6 billion deal with Jane Street signed in April. It also signed a deal with Anthropic last month, although the terms of the agreement are not public. Those investments into AI infrastructure should boost shares of CoreWeave, if a series of planned data centers are built according to schedule, per Bank of America. "Investors are increasingly focused on how efficiently this investment in capacity is converted into recognized revenue, particularly as RPO reached $60.7bn last quarter and incremental customer commitments were announced throughout the quarter," Bank of America analyst Tal Liani said Tuesday in a note to clients. "As such, timely buildout execution and power availability remain critical, as any delays could shift the timing of revenue recognition." Investors will look for signs that the company is making progress toward those initiatives when CoreWeave releases its first-quarter earnings report Thursday after the bell. The analysts' calls fall in line with consensus on the Street. Of the 36 analysts covering the stock, 28 have a buy or strong buy on shares, LSEG data shows.