Evercore ISI started coverage of CoreWeave with an Outperform rating and $175 price target, saying the fast-growing cloud infrastructure company is emerging as a key provider of computing power for artificial intelligence applications.
The brokerage said it views CoreWeave as uniquely positioned to serve both AI-first startups and traditional enterprises building and deploying AI models, calling it an “at scale AI-as-a-Service pure play.”
CoreWeave operates more than 250,000 GPUs across 33 data centers, making it one of the largest independent GPU cloud operators globally.
Unlike traditional hyperscalers such as Amazon or Microsoft, CoreWeave’s infrastructure is purpose-built specifically for AI workloads, allowing it to deliver more than 20% better hardware utilization, Evercore said.
The bank pointed to several near-term catalysts, including an expanded partnership with OpenAI, the potential addition of Google as a cloud customer, a supply agreement with Nvidia that guarantees any unused capacity will be absorbed through 2032, and upcoming disclosure of a new large-scale hyperscaler contract.
Evercore said CoreWeave has strong forward revenue visibility, with about 98% of its sales coming from multi-year “take-or-pay” contracts, typically priced per GPU-hour.
Customer commitments in backlog recently climbed to about $30 billion, roughly half of which stems from OpenAI.
While customer concentration remains high, Microsoft and OpenAI accounted for nearly 80% of second-quarter revenue, Evercore expects the client mix to broaden as new enterprise wins ramp.
The firm flagged high capital expenditure requirements as a key debate, with CoreWeave expected to double spending to more than $20 billion in 2025 to build out new data centers.
However, it said operating margins should expand from the mid-to-high teens to the mid-20% range by 2027 as the business scales and older GPUs move past their depreciation window.
Evercore values the company at 10 to 11 times estimated 2027 EBITDA, a discount to larger cloud and data center peers.
Source :
https://www.investing.com/news/stock-market-news/coreweave-initiated-at-outperform-by-evercore-on-ai-infrastructure-demand-4263874
