Nvidia-backed CoreWeave soars 100% since IPO as investors see AI demand outweighing ‘risky’ business model

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Nvidia backed CoreWeave soars 100 since IPO as investors see AI.jpeg

Coreweave (CRWV), backed by NVIDIA, has increased by more than 100 % since the subscription in March, as investor hopes in the boom of artificial intelligence outweighed concerns about what some analysts say it is a risky business model.

During the same time frame, the S&P 500 gained 7 % more modest. Coreave is one of the largest holders of graphics processing units in NVIDIA (GPU) and its ability to the data center is rented to large technology companies such as Microsoft (MSFT) and Meta (Meta) while it is stampede to run artificial aspirations.

NVIDIA (NVDA) has a 7 % stake in Coreweave, according to the introduction of the AI Chipmaker file to SEC on Thursday. In addition to the company’s support, NVIDIA sells chips to Coreave’s data center capacity.

Coreave has reported the results of its first quarterly profits as a public company this week, which includes high revenues for the three months ending March 31 and the up expectations for the upcoming revenue for this year, before Wall Street’s expectations, on a $ 4 billion deal with the Chatgpt Openai maker. However, the stock decreased after the profit call, as it was withdrawn through higher expectations than expected for capital expenditures.

Wall Street analysts kept their optimism for Coreweave’s share after his profits. Jefferies Brent Thill, which carries a purchase on the arrow, raised its target goal on the stocks to $ 80 from $ 51 on Thursday, noting “uninterrupted demand.”

Macquarie Paul Golding analyst raised his look at $ 65 out of $ 56. He said in the note that Coreweave’s future “highlights the normal nature constantly to seek artificial intelligence, along with Coreweave’s lightness in response to this.”

At the same time, Mourghan Stanley Keith Weiss, who got an equal weight on stock, said, noting that “the accumulation of large contracts from the most demanding Genai users provides strong verification of the strong Coreave location.” It raised its target price to $ 58 from $ 46.

Other analysts are still skeptical.

The Louor generation, a DA DAVIDSON analyst, reduced the Coreweave classification to a weak performance on Thursday, citing the expectal expenses of $ 23 billion for the year 2025, just as it is much less than the return (about 5 billion dollars) in revenue.

In an interview this week, Lahoo finance told Coreweave’s “very risky”, as the company uses debt financing, which was borrowed against its neglected store for the previous NVIDIA Hopper AI, to buy more NVIDIA chips to stay able to compete in the AI datab market. Coreave has a large amount of debt – approximately $ 12 billion in debt obligations at very high interest rates, according to Lorean. Only interest expenses rise, with approximately 550 % to $ 264 million in the first quarter of the previous year.

“Coreove’s Capex structures and debt structures strategically with long-term customer contracts-clear evidence of the strong demand signals it receives from customers, and providing the company with a strong vision of revenues and attractive unit economies,” Coreave spokesman told Yahoo Finance.

Michael Entertainment, founder and executive of Coreweave, is interacting with a cloud services supported by NVIDIA, during the company’s general subscription to the Nasdaq market in New York City on March 28 (Reuters/Brendan McDested) · Reuters / Reuters

Coreave also depends heavily on a few customers. On Thursday’s file, he said 72 % of her revenue came from Microsoft in the first quarter of 2025.

“Hunting here is if the injured at some point decide to do something of their own – whether Microsoft is building their own data centers, AWS [Amazon (AMZN) Web Services] Building their data centers – Easter decides to use more ASIC products and not to use graphics processing units themselves from NVIDIA anymore. “

ASIC products are dedicated chips made by companies like Broadcom (AVGO), which are distinguished from the most important graphics processing units in NVIDIA.

Wang said that Korween’s increasing dependence on Openai is also concerned. Openai’s commitment to an additional $ 4 billion to Coreweave in May came to the highest deal previously announced with the company with the company in March, according to the Coreav’s organizational report to the Securities and Exchange Committee on Thursday.

Openai loses money and depends on continuing to raise capital, and it does not have to finance its $ 16 billion commitment to Couffe and the commitment of $ 19 billion to the so -called Stargate AI project, which is said to be struggling to get out of the ground. Wang also expressed concerns that the largest supporter in Openai, Softbank, has a great deal of debt.

Loror said that Amnesty International only continues to rise at the rates of “Asia” can succeed Coreave. This is a risk because large technology still learn how to liquefy technology and can eventually reach spending on the capacity of the artificial intelligence data center. And if the Big Tech is back from this capacity, it is possible that companies will stop leasing an additional capacity of Coreweave above the operation of their data centers.