HSBC Maintains Reduce on CoreWeave (CRWV) Amid Margin Pressures, Debt Risks

CoreWeave Inc. (NASDAQ:CRWV) is one of the best data center stocks to buy now. On August 13, analysts from HSBC reiterated their Reduce rating on CoreWeave Inc. (NASDAQ:CRWV), keeping the price target at $32.

The analysts expressed caution over the company’s margin outlook, with its earnings projections sitting well below market consensus. While the Street expects CoreWeave Inc. (NASDAQ:CRWV) to expand adjusted EBITDA margins to around 70% by late 2025, HSBC analysts forecast a decline to just above 60% in the second half of the year, citing weaker utilization of data center assets. That is much weaker than the 62.6% the company reported in the Q2 2025.

A close-up of a network administrator’s hands working on a cloud computing server.

The analysts also questioned the likelihood of long-term margin recovery, pointing out that structural costs such as rent and power leave limited room for improvement. These costs currently account for over 20% of revenue.

In addition, the analysts pushed back on consensus assumptions around financing costs. Consensus assumes the company’s implied interest rate could decline to 8.1% by 2028 from 10.7% in the second quarter of 2025. HSBC described this assumption as too optimistic, suggesting that debt expenses will likely remain a heavier drag than investors expect.

CoreWeave Inc. (NASDAQ:CRWV) is an AI cloud-computing company that specializes in providing cloud-based graphics processing unit (GPU) infrastructure to artificial intelligence developers and enterprises.

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Disclosure: None. This article is originally published at Insider Monkey.