CoreWeave Stock Soars. It Got a Buy Rating With a Big Asterisk.

CoreWeave is expected to turn more than $1 billion in net losses in 2025 into a profit by 2027. (Michael M. Santiago/Getty Images)

Key Points

• CoreWeave shares rose by double digits on Friday, following a 4.9% gain on Thursday. Shares are down by 65% since June 20.
• Citi renewed coverage with a Buy rating, lowering the price target to $135 from $192, citing high risk due to limited trading history.
• CoreWeave tripled customers contributing over $100 million in revenue and expects to achieve net profit by 2027.

CoreWeave shareholders have endured a brutal second half of the year, but they got some reprieve to end the week. Further gains lie ahead, though they come with some risk, analysts at Citi say.

Shares of the artificial-intelligence infrastructure company soared 16% to $78.59 on Friday after closing Thursday up 4.9%. That upturn follows a nearly six-month skid in which the stock fell 65% from a closing high of $183.58 on June 20.

Created with Highcharts 9.0.1CoreweaveStock ticker: CRWVSource: FactSetNote: class A sharesAs of Dec. 20

Created with Highcharts 9.0.1April 2025Dec.255075100125150175$200

Citi renewed coverage of CoreWeave shares with a Buy rating and lowered its price target to $135 from $192 in a research note late Thursday night. The firm added a High Risk designation to the rating, flagging the company’s “limited trading history and high customer concentration, which may expose shares to greater volatility.” The stock began trading in March after its initial public offering priced at $40 a share.

As always for CoreWeave, the bull case centers on the demand for computing capacity at the company’s 41 active data centers. That need isn’t going anywhere, Citi noted.

“The demand is so overwhelming that the company frequently turns away customers,” wrote Citi analyst Tyler Radke, pointing to an estimated $40 billion to $50 billion in potential spending from Microsoft that went to other providers due to capacity constraints.

On its November earnings call, CoreWeave said it had tripled the number of customers contributing more than $100 million in revenue from last year. More than 60% of revenue is tied to investment-grade customers, Citi noted.

The company relies on high amounts of capital spending to build and equip data centers, raising questions among some observers about its ability to turn a profit and meet relatively high-interest debt obligations.

“The company is in hypergrowth mode and the management team is choosing to invest,” a CoreWeave spokesperson told Barron’s this week, referring to the company’s investments in expanding capacity.

Wall Street expects CoreWeave to turn a profit soon. Analysts polled by FactSet forecast adjusted net losses to total $581 million in 2025, before dropping to $76 million in 2026 and becoming a net profit in 2027.

Citi has even higher expectations. The bank says it believes CoreWeave will post net income of $384 million in fiscal 2026 on the back of explosive revenue growth. The firm’s forecasts for capital spending and interest expenses are also significantly higher than the consensus.

Citigroup or its affiliates own 1% or more of any class of common equity securities of CoreWeave, the firm disclosed.

On top of the Citi note, CoreWeave shareholders got word Thursday that the company has joined Genesis Mission, a Department of Energy initiative to accelerate scientific discoveries, strengthen national security, and advance energy innovation.

Earlier this year, the company announced CoreWeave Federal, a business unit focused on providing AI cloud services to federal agencies and the defense industry.

Write to Nate Wolf at nate.wolf@barrons.com