CoreWeave (CRWV) stock is up in pre-market trading even after Bernstein analyst Madison Rezaei reiterated an Underperform rating and a $56 price target, pointing to about 35% downside risk from current levels. The firm said that even if AI demand remains strong, CoreWeave may not be the long-term winner.
Claim 30% Off TipRanks
New trading tool for AMZN bullsWhy Bernstein Is Bearish on CoreWeave Stock
Bernstein said CoreWeave has done well so far and should continue to grow in the near term. The firm expects the company to sign about $35 billion in new deals over the next two years, which should support revenue growth.
At the same time, the firm believes expectations for CoreWeave’s future growth look too high beyond 2027.
As more data centers are built, the supply of AI infrastructure is increasing. Also, large tech firms are building their own systems, which means they may rely less on outside providers like CoreWeave. Companies such as Amazon (AMZN), Alphabet (GOOGL), and Microsoft (MSFT) are already expanding their in-house capacity at a fast pace. As this continues, they may not only reduce their use of CoreWeave but also compete for the same AI workloads.
Bernstein also pointed to Nvidia (NVDA), which has invested in CoreWeave and firms like Nebius Group (NBIS). The firm said these investments are mainly meant to expand the AI ecosystem and drive demand for Nvidia’s chips.
While that helps companies like CoreWeave grow in the near term, it does not guarantee steady business over time, especially as larger cloud players build their own capacity.
Is CRWV a Good Stock to Buy?
Currently, Wall Street has a Moderate Buy consensus rating on CoreWeave stock based on 13 Buys, eight Holds, and one Sell recommendation. The average CRWV stock price target of $114.20 indicates 34% upside potential from current levels.
