CoreWeave Shares Slide as UBS Keeps Buy but Trims Target

what happened

Shares of CoreWeave kept falling on Friday, even though UBS maintained its Buy recommendation on the AI infrastructure firm, according to gurufocus.com. UBS lowered its price target to $105 from $120, as cited by Investing.com. Investors doubt that the heavy borrowing needed to build AI data centers will pay off over the long run, especially with rates staying high and financing becoming pricier.

BofA also kept a Buy rating with a $140 target, but its estimate suggests CoreWeave could require roughly $20 billion of extra capital to meet committed customer demand. Remaining performance obligations of about $129 billion form the backbone of the bullish argument. UBS analyst Karl Keirstead projects revenue per gigawatt climbing from about $11 billion today to more than $15 billion over time, provided GPU rental prices hold up.

why it matters

The central question is whether CoreWeave can expand capacity faster than its debt grows. Market participants are watching funding costs, bond yields, conversion of its backlog into revenue and free cash flow. The stock's decline suggests a positive analyst view alone may not be enough to reverse the trend.

market impact

CoreWeave and AI infrastructure: heavy debt load and expensive financing weigh on the shares

tags

instruments