Nvidia-backed CoreWeave gets largely bullish coverage from brokerages

Wall Street brokerages on Tuesday began coverage of Nvidia-backed CoreWeave with broadly bullish views, although the stock has failed to gain traction with investors following a lackluster initial public offering and market debut. Among the thirteen major brokerages covering CoreWeave’s shares, Needham and Stifel set the highest price target at $55, while Melius Research had the lowest at $40.

The stock, which was priced at $40 in its IPO, was last up 6% to $37.58. After the expiration of the industry-required quiet period, the brokerages started coverage of the stock, citing the company’s strong foothold in the booming AI infrastructure market for their bullish stance.

“CoreWeave exhibits a track record of being first to deploy next-gen GPUs, making it difficult for other hyperscalers to claim industry leadership,” J.P.Morgan said. Livingston, New Jersey-based CoreWeave offers access to data centers and Nvidia chips, which are highly coveted in the competitive AI development landscape. However, the brokerages also expressed caution about the company’s over-reliance on some of its customers and a tough market backdrop.

“Volatile macro (and equities) backdrop may limit investors’ willingness,” said Morgan Stanley, as it started coverage with an “equal-weight” rating. Last year, CoreWeave – whose 32 data centers house over 250,000 GPUs, mainly supplied by Nvidia – generated 77% of its revenue from just its top two clients, one of which was Microsoft.

Citigroup, which started coverage of the stock with a “neutral” rating, said the significant reliance on Microsoft posed a risk as the tech firm has signaled a slowdown in AI spending.

Ahead of its IPO, CoreWeave signed a blockbuster $11.9 billion, five-year deal with OpenAI, Reuters reported last month, forging an alliance with the industry’s top startup. “Close relationship with Microsoft and OpenAI could cut both ways … and the customer concentration here does pose a risk,” Barclays said.

“We expect the stock to provide a wild, lumpy, volatile ride, requiring a risk tolerance that may not exist for most investors,” J.P.Morgan said, warning that the firm’s debt-fueled, capital-intensive business could pose risks. The IPO was underwritten by a syndicate of 18 banks, led by Morgan Stanley, J.P.Morgan and Goldman Sachs and was seen as a pivotal gauge of investor enthusiasm for new listings and AI-related stocks, especially in light of China’s DeepSeek launch.