Citizens JMP Initiates on CoreWeave (CRWV) With a Cautious View

An analyst from Citizens JMP initiated coverage on CoreWeave Inc. (NASDAQ:CRWV) with a Market Perform rating but without assigning a price target.

On the positive side, the analyst noted that CoreWeave has a low-cost, high-density infrastructure used initially for bitcoin mining, which it could repurpose to support its data center expansion. While the analyst agrees that CoreWeave’s valuation multiples are not expensive, he emphasized that the company’s funding needs are high and raised concerns about the business model.

A technician working on a server of bitcoin mining equipment in a data center.

The analyst believes that the company’s current level of risk and uncertainty is relatively high, and thus, he believes that the stock is fairly valued at these levels.

CoreWeave stock has surged around 170% this year, mainly due to Nvidia Corp.’s backing and the robust long-term growth potential in the AI infrastructure market.

CoreWeave Inc. (NASDAQ:CRWV) provides AI developers and companies with cloud-based graphics processing unit (GPU) infrastructure, primarily based on Nvidia GPUs.

While we acknowledge the potential of CRWV as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRWV and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.