American banking giant JPMorgan has raised its outlook on cloud computing firm CoreWeave (NASDAQ: CRWV), ahead of the company’s quarterly earnings release on Tuesday.
Analyst Mark Murphy doubled his price target to $135 from $66, maintaining an ‘Overweight’ rating, a 104% increase from the previous target.
By press time, CRWV was trading at $136, up over 5%, bringing its year-to-date gains to 223%.
Overall, CoreWeave shares have surged nearly 360% since their late-March IPO, driven by strong investor demand and its ties to Nvidia (NASDAQ: NVDA), which supplies the GPUs powering the company’s AI infrastructure.
Why JP Morgan is bullish on CRWV stock
Murphy cited strong growth prospects, expanding opportunities in the artificial intelligence sector, and CoreWeave’s differentiated solutions as key factors behind the upgrade.
“Our sense is that CoreWeave’s opportunities are going to get bigger and lumpier, likely to the surprise of investors, though we are not making a specific call on the upcoming Q2 results as it is likely a futile exercise to speculate on the closing of specific deals,” Murphy said.
He also pointed to the company’s $11.9 billion, five-year deal with OpenAI for AI data centers as a major growth catalyst.
However, Murphy flagged risks, noting CoreWeave’s high debt levels from heavy capital expenditures and the “extreme lumpiness” in its large bookings and buildouts. The analyst cautioned that these factors could lead to continued volatility in the stock.
Despite these concerns, Murphy expressed confidence in the company’s long-term trajectory, highlighting a robust business pipeline and the potential for “outsized growth” from high-impact transactions.
Wall Street cautious on CoreWeave stock
Meanwhile, CoreWeave currently holds a “Hold” consensus rating from 21 Wall Street analysts at TipRanks, with six recommending a ‘Buy’, 13 holding, and two advising a ‘Sell’.
The average 12-month price target stands at $107.59, implying a potential downside of 16.95% from the latest closing price. Analyst forecasts vary widely, with the highest estimate at $200 and the lowest at $23.
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