A recent report highlighted concerns about Oracle’s margins in its AI cloud business, prompting Evercore analyst Amit Daryanani to reassess CoreWeave’s (CRWV) unit economics. He reiterated a buy rating on CoreWeave with a $175 price target, citing positive fundamentals. CoreWeave’s stock rose about 9% following the launch of its Serverless RL platform, which utilizes reinforcement learning for AI training.
Daryanani emphasized that despite potential capital expenses and debt from GPU cloud deployments, CoreWeave’s model is resilient, profitable at scale, and effectively manages risks through multi-year contracts averaging four to five years. He highlighted a master services agreement with Nvidia as a safeguard against unused capacity and noted that upfront payments cover significant initial costs, showcasing strong cash flow management.
While Daryanani projected strong profitability margins—40% to 50% for EBIT and around 70% for EBITDA—he cautioned about revenue concentration risks, particularly with Microsoft/OpenAI as a major client. Overall, CoreWeave has a consensus rating of Moderate Buy on Wall Street, with an average price target of $154.42, suggesting a 10.3% upside potential. The stock has seen notable growth since its IPO, rising from $40 to $139.98.
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