Mizuho Securities analyst Gregg Moskowitz sees minimal long-term disruption for CoreWeave (CRWV) after Core Scientific’s (CORZ) shareholders rejected their proposed $9 billion merger. He maintained his “Hold” rating and $150 price target, which implies 14.5% upside potential. CRWV stock dropped 6.3% following the announcement.
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CoreWeave is an AI cloud computing company specializing in providing cloud-based graphics processing unit (GPU) infrastructure to AI developers and enterprises. Core Scientific operates data centers for cryptocurrency mining.
Strategic Impact from the Rejection
Moskowitz noted that both companies will continue operating independently and CoreWeave’s commercial partnership with Core Scientific will remain intact. He believes that the leasing deal with Core Scientific remains an important part of CoreWeave’s AI journey.
He highlighted that CoreWeave and Core Scientific have close ties with over $10 billion in future lease commitments and about 840 megawatts (MW) of contracted capacity. CoreWeave had aimed to save $500 million annually by 2027 through the merger, mainly by consolidating lease costs, but these savings are now off the table.
CoreWeave Can Capture Meaningful Share Alone
Moskowitz sees CoreWeave as capturing a meaningful share of the AI cloud provider market, although he had downgraded CRWV to a Hold rating in July due to the “outsized returns” since its IPO.
While the merger rejection closed off opportunities to lower its cost of capital and access infrastructure-focused financing, CoreWeave remains committed to executing on its growth strategy. Moskowitz expects more details on CRWV’s financing and power plans when it reports third-quarter earnings on November 10.
M&A Activity and Continued Growth
After the merger fell apart, CoreWeave stated that it is staying focused on disciplined execution and building long-term shareholder value, including through selective and strategic acquisitions.
The company also announced the acquisition of Marimo, which develops an AI-based, interactive development environment for Python designed for AI and data tasks. This is one of several recent smaller acquisitions, and the company is expected to keep pursuing more deals.
Is CoreWeave a Strong Buy?
Analysts remain divided on CoreWeave’s long-term outlook. On TipRanks, CRWV stock has a Moderate Buy consensus rating based on 13 Buys, 11 Holds, and one Sell rating. The average CoreWeave price target of $156.87 implies 19.7% upside potential from current levels. Since its public listing on March 31, 2025, CRWV stock has surged nearly 253%.
