CoreWeave Stock Drops 9.13% After Barclays Downgrade

On May 29, CoreWeave, a leading company in the artificial intelligence sector, saw its stock price plummet by 9.13%. This sharp decline was primarily due to a cautious assessment from Barclays, which downgraded the stock to a "hold" rating. The financial institution cited limited short-term upside potential as the reason for the downgrade.

Barclays analysts pointed out that while CoreWeave's long-term prospects remain robust, the current valuation presents challenges for further significant gains. The enterprise value to 2026 earnings before interest and taxes (EV/EBIT) multiple stands at 41 times, assuming total debt of approximately 31.4 billion dollars by 2026. This valuation is notably higher than that of its industry peers, indicating that the stock may have limited room for substantial price increases in the near term.

Despite the short-term concerns, Barclays emphasized the strategic importance of CoreWeave as one of the first pure generative AI software targets. The company's long-term growth potential should not be underestimated, given its position in the rapidly evolving AI landscape. This assessment underscores the dual nature of CoreWeave's valuation: while it may face short-term headwinds, its strategic value and long-term prospects remain strong.