AI Daily: CoreWeave reports results, signs deal with OpenAI

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

QUARTERLY RESULTS: CoreWeave (CRWV) reported Q1 losses per share of ($1.49) vs. (62c) last year, and Q1 revenue of $981.63M, with consensus at $859.77M. “We’ve delivered an outstanding start to 2025 on multiple fronts. Our strong Q1 financial performance caps a string of milestones including our IPO, our major strategic deal with OpenAI as well as other customer wins, our acquisition of Weights & Biases and many technical achievements,” said CEO Michael Intrator. “Demand for our platform is robust and accelerating as AI leaders seek the highly performant AI cloud infrastructure required for the most advanced applications. We are scaling as fast as possible to capture that demand. The future runs on CoreWeave.”

“CoreWeave’s strong financial performance in Q1 highlights the large and rapidly growing opportunity,” said CFO Nitin Agrawal. “We are focused on executing, while effectively managing our capital structure to support accelerating investments in growth and maintaining flexibility to capitalize on strategic opportunities.”

Barclays raised the firm’s price target on Overweight-rated CoreWeave to $70 from $60 following the Q1 report. The 14% revenue beat and 420% year-over-year revenue growth at scale for CoreWeave shows the power of the new generative artificial intelligence businesses, the firm tells investors in a research note. Barclays says it will take investors “time to fully get comfortable with the different nuances” like the OpenAI contract not yet fully in remaining performance obligation, or the big spending ramp in the second half of the year. However, the firm says it remains excited.

Meanwhile, Stifel raised the firm’s price target on CoreWeave to $75 from $55 and kept a Buy rating on the shares. In its first quarterly report as a public company, CoreWeave reported “strong results,” the firm tells investors. CoreWeave followed its recently completed $11.9B strategic contract with OpenAI with the addition of a new hyperscaler customer that Stifel thinks is Google (GOOGL), several expansion agreements with existing large customers, including a $4B deal, and new enterprise customers, such that revenue backlog not including the recent $4B deal was $25.9B exiting the March quarter, the firm noted.

Wells Fargo, Jefferies , Northland , Mizuho, BofA and Morgan Stanley also raised their price targets on CoreWeave’s shares.

NOT A BUSINESS WORTH SCALING: More bearish on the name post-earnings, DA Davidson downgraded CoreWeave to Underperform from Neutral with an unchanged price target of $36. The firm says that the first detailed earnings report, with updated actuals and guidance, confirms its concern that CoreWeave is “not a business worth scaling, and we question the value of the equity.” DA Davidson believes CoreWeave is a business not worth scaling if it can only generate 5% returns on its assets and has to pay 12.5% interest on the debt necessary to acquire those assets, arguing that the notion that “this destruction of capital is a matter of scale does not hold up” for a company at a $4B revenue run rate already operating 33 data centers.

CONCERNS ON REVAMP: A group that opposed Microsoft (MSFT)-backed OpenAI’s restructuring wrote the startup’s new organizational plan does not go far enough to safeguard the company from generating dangerous AI technology, Anna Tong of Reuters reports. In a letter submitted to the California and Delaware attorneys-general, members of the ‘Not for Private Gain’ group argued OpenAI’s announcement to dial back some of its restructuring might “be a step in the right direction,” but does not adequately prevent the company from straying from its original mission to ensure AI developed benefits humanity.