CoreWeave Initiated with Buy Rating Due to AI Infrastructure Demand

Argus initiated coverage on CoreWeave with a Buy rating due to its potential to capitalize on the high demand for AI infrastructure. The firm set a price target of $200.

Argus Research has initiated coverage of CoreWeave (CRWV) with a Buy rating, citing the company's ability to capitalize on the high demand for artificial intelligence (AI) infrastructure. The research firm set a price target of $200 for the stock [1].

CoreWeave, a hyperscaler, has seen its stock price rise significantly since its initial public offering in late March. However, it has experienced a decline over the past week following the announcement of its plan to acquire Core Scientific (CORZ) for $9 billion. The acquisition has led to ratings cuts for both companies [2].

Despite the recent market reaction, Argus analysts Jim Kelleher and Masako Inagaki remain optimistic about CoreWeave's prospects. They believe the acquisition will strengthen the company's revenue growth and profitability. The analysts expect CoreWeave to continue pursuing growth through organic demand and ongoing business development and mergers and acquisitions (M&A).

CoreWeave's partnerships with leading technology companies such as Nvidia (NVDA), Dell (DELL), Super Micro Computer (SMCI), IBM (IBM), and OpenAI further bolster its position in the AI infrastructure market. The company forecasts revenue in the range of $4.9 billion to $5.1 billion for 2025, representing a 363% growth from its pro forma 2024 revenue. Additionally, CoreWeave expects adjusted operating income in the range of $800 million to $830 million and capital expenditures (Capex) of $20 billion to $23 billion to meet customer demand [1].

In conclusion, Argus Research's Buy rating for CoreWeave reflects the company's potential to benefit from the growing demand for AI infrastructure. However, investors should closely monitor the company's progress and the market's reaction to the Core Scientific acquisition.

References:
[1] https://finance.yahoo.com/news/coreweave-initiated-texas-instruments-upgraded-133824154.html
[2] https://seekingalpha.com/news/4466909-argus-initiates-coreweave-with-buy-rating-due-to-ai-infrastructure-demand