Artificial intelligence (AI) cloud company CoreWeave (CRWV) reported a 134% year-over-year surge in its third-quarter revenue and surpassed expectations. However, CRWV stock was down 15% at the time of writing, as the company’s full-year guidance disappointed investors. In reaction to the Q3 print, top D.A. Davidson analyst Gil Luria reaffirmed a Sell rating on CoreWeave stock with a price target of $36, citing several issues, including “deteriorating profitability.”
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CoreWeave now expects 2025 revenue in the range of $5.05 billion to $5.15 billion, below Wall Street’s consensus estimate of $5.29 billion.
Top Analyst Retains Sell Rating on CRWV Stock
Luria noted that CoreWeave’s Q3 revenue growth marks a “notable” sequential slowdown from the 207% growth in the second-quarter top line. The 5-star analyst stated that the company’s revenue backlog increased $25.5 billion sequentially to $55.6 billion, driven by a new $14.2 billion partnership with Meta Platforms (META) and a $6.5 billion extended deal with OpenAI (PC:OPAIQ). Luria pointed out that CRWV’s $6.3 billion agreement with Nvidia (NVDA) was not included in the backlog due to the nature of the deal. Under the agreement, Nvidia has agreed to purchase any unsold cloud computing capacity from CoreWeave until April 13, 2032.
Meanwhile, Luria noted that CoreWeave lowered its 2025 guidance to the range of $5.05 billion to $5.15 billion, down from its previous outlook of $5.15 billion to $5.35 billion. The analyst also highlighted the downward revision in capital expenditure guidance due to capacity delays at a third-party data center partner.
Furthermore, he stated that CRWV’s adjusted operating income of $217 million and interest expense of $311 million reflected persistent “poor unit economics.” Luria was also disappointed with the notable contraction in CoreWeave’s gross, operating, and net margins. “We continue to believe this business is not worth scaling,” contended Luria.
Several Wall Street analysts lowered their price targets in reaction to CoreWeave’s weak guidance. In fact, JPMorgan downgraded CRWV stock to Hold from Buy, noting supply constraints.
Is CRWV Stock a Good Buy?
Wall Street has a Moderate Buy consensus rating on CoreWeave stock based on 12 Buys, 11 Holds, and one Sell recommendation. The average CRWV stock price target of $155.36 indicates 71% upside potential.
Note that these price targets/ratings could be revised as more analysts react to the company’s weak outlook.
