CoreWeave Stock Alert: Analyst Predicts 70% Plunge Amid High Costs and Concentrated Customer Base.

HSBC analyst Abhishek Shukla initiates coverage of CoreWeave (CRWV) with a "Sell" recommendation and $32 price target, implying a 75% fall from current levels. The analyst cites escalating costs, high-capital needs, and deep customer concentration as reasons for the bearish note. CoreWeave has risen 240% since its IPO in March, driven by AI infrastructure hype and partnerships with OpenAI and Microsoft. The company's Q1 2025 results showed a GAAP net loss of $314.6 million, more than twice as wide as the prior-year quarter.

CoreWeave (CRWV) has been the subject of a significant downgrade following a new analysis from HSBC's Abhishek Shukla. The analyst initiated coverage with a "Sell" recommendation and a price target of $32, implying a 75% fall from the current levels. Shukla cited escalating costs, high capital needs, and deep customer concentration as key reasons for his bearish outlook [1].

CoreWeave, a Livingston, New Jersey-based cloud computing company, has seen a remarkable 240% surge since its IPO in March 2025, driven largely by the hype around AI infrastructure and strategic partnerships with OpenAI and Microsoft (MSFT). However, the company's rapid growth has also led to concerns about sustainability and valuation.

The company's Q1 2025 results highlighted the challenges ahead. Despite a 420% year-over-year revenue growth to $981.6 million, CoreWeave reported a GAAP net loss of $314.6 million, more than double the loss from the prior year. Operating loss during the quarter was $27.5 million, a 263% increase from the previous year. The heavy stock-based compensation of $177 million also weighed on net profitability post-IPO [1].

Shukla's $32 price target is the lowest on the Street, with the average analyst target price for CoreWeave standing at $90.58, indicating a 30% downside from the current price. The wide range of price targets (from $32 to $185) reflects the extreme disagreement among analysts over CoreWeave's future direction and valuation [1].

The HSBC downgrade is a stark reminder of the risks associated with CoreWeave's high valuation multiples. The company's price-sales ratio is 21.5x, and its price-book ratio is 28.1x, which are indicators of potential valuation risk due to the lack of earnings and a capital-intensive business model [1].

Investors and financial professionals should closely monitor CoreWeave's future earnings reports and any developments in its strategic partnerships to gauge the impact of the bearish note on the stock's performance.

References:
[1] https://www.barchart.com/story/news/33581427/crwv-stock-alert-this-analyst-warns-coreweave-could-plunge-70-from-here