<\/p>\n
Bank of America just got even more bullish on CoreWeave (CRWV), spearheaded by the market\u2019s insatiable demand for AI infrastructure.<\/p>\n
On May 6, according to TheFly, BofA raised its price target on the AI cloud giant\u2019s stock to $140 from $120, while maintaining a \u201cBuy\u201d rating, driven by relentless demand for AI inference.<\/p>\n
The call comes after CoreWeave delivered another Q1 earnings smasher, with a sizeable top-line beat and a ballooning backlog figure that grabbed Wall Street\u2019s attention.<\/p>\n
For perspective, CoreWeave stock has been one of the few stocks that have killed it this year, rising roughly 60% year-to-date, according to Seeking Alpha.<\/p>\n
Its position as an AI infrastructure pure-play gives it a critical competitive edge, as companies race to secure enough compute power to train and run complex AI models at scale.<\/p>\n
That tremendous momentum is starting to show up in the numbers.\u00a0<\/p>\n
Q1 sales jumped 127% year-over-year to $2.08 billion, blowing past estimates by $110 million, but its GAAP loss of -$1.40 per share came in 20 cents worse than expected.<\/p>\n
According to CoreWeave\u2019s investor relations, the company\u2019s backlog surged 49% quarter over quarter to roughly $99.4 billion.\u00a0<\/p>\n
A core driver of that was the tech giant\u2019s previously announced $21 billion agreement with Meta Platforms (META), along with a growing partnership with OpenAI and a strategic backstop agreement involving Nvidia (NVDA).<\/p>\n
That enormous backlog creates visibility into future sales at a point when the AI infrastructure race is still in its early innings.<\/p>\n
CoreWeave price target raised as AI inferencing boom accelerates<\/p>\n
Chris J. Ratcliffe/Bloomberg via Getty Images<\/p>\n
Key takeaways from Bank of America\u2019s CoreWeave price target revampPrice target raised to $140 from $120, Buy rating reiterated, as data center execution stays on track.Backlog hit $99.4 billion, up from $66.8 billion in the prior quarter, with inferencing now representing over 50% of compute usage.Data center buildout is progressing smoothly, with active power crossing 1 gigawatt and 700 megawatts more expected online by year-end.Margins are expected to improve sequentially through 2026, eventually hitting 8% for the full year, even as a heavy capex cycle pressures near-term profitability.CoreWeave stock returns versus. the S&P 500Over the past week, CoreWeave stock fell 4.09%, compared with a 2.33% gain for the S&P 500.Over the past month, it rose 28.40%, compared with a 9.08% gain for the S&P 500.Over the past six months, it rose 9.75%, compared with a 9.96% gain for the S&P 500.Year to date, it rose 59.41%, compared with an 8.08% gain for the S&P 500.Over the past year, it rose 107.55%, compared with a 30.63% gain for the S&P 500.
\nSource: Seeking Alpha.
\nThe inferencing shift that\u2019s changing the narrative<\/p>\n
While AI training grabs the headlines, it\u2019s inferencing, the day-to-day running of models, that\u2019s quietly becoming the backbone of CoreWeave\u2019s growth story.<\/p>\n
More AI:<\/p>\n
Micron sits at the center of a red-hot chip rallyIBM CEO sends blunt message on AI and quantum computingAnthropic CEO makes shocking admission about AI<\/p>\n
Inferencing already accounts for more than half of BofA’s compute consumption math, and \u201cmakes revenue stickier and harder to predict than one-off training jobs,\u201d according to the research note.<\/p>\n
On top of that, BofA says inference is becoming a far bigger driver of future AI demand as businesses shift from building models to deploying them at scale.\u00a0<\/p>\n
CoreWeave management reinforced that view in its latest earnings call, noting that its strong ARR growth is a good long-term signpost of the market\u2019s direction.<\/p>\n
CoreWeave\u2019s mega deals underscore a timeline of AI dominance<\/p>\n
The sheer size of CoreWeave\u2019s customer agreements is giving Wall Street enough impetus to raise targets.<\/p>\n
The company has stacked up over $95 billion in total contract pipeline, securing demand well into the next decade.<\/p>\n
Here\u2019s a look at the major deals CoreWeave has locked in over the past year:<\/p>\n
OpenAI: An initial $11.9 billion agreement in March 2025, expanded by $4 billion in May, and another $6.5 billion in September 2025, bringing the total to $22.4 billion.Meta Platforms: A $21 billion multi-year deal running through December 2031, with an option to extend into 2032.Nvidia: A $6.3 billion take-or-pay backstop that requires Nvidia to purchase any unsold CoreWeave capacity through April 2032, essentially guaranteeing utilization.<\/p>\n
It’s not only the cloud giants who’re doing well. This runs through the entire semiconductor supply chain.<\/p>\n
The messy margin picture and why it\u2019s not a dealbreaker<\/p>\n
A main problem for CoreWeave is that its AI infrastructure at this scale is still burning a lot of cash, as the company’s first quarter showed.<\/p>\n
The company posted $7.7 billion in capital expenditures in Q1, with another $8 billion expected in the second quarter.<\/p>\n
That level of spending helped keep operating margin at just 1%, a figure that would likely unsettle investors in many other industries.<\/p>\n
Related: Wells Fargo revamps CoreWeave stock price target for 2026<\/p>\n
BofA, though, is not backing away from the story.\u00a0<\/p>\n
\u201cAn intense capex ramp will inherently continue to pressure margins, but we expect OM to improve sequentially throughout 2026,\u201d\u00a0<\/p>\n
CoreWeave management also pointed to a factor that may ease some of the margin pressure. Most equipment costs, including Nvidia GPUs and Dell systems, are locked in when customer deals are signed. That helps secure component pricing and reduces exposure to supply-chain inflation, which is especially important as the company continues to expand at this pace.<\/p>\n
Valuation still looks expensive<\/p>\n
Though there is a lot to like about CoreWeave\u2019s growth story, the stock is hardly a cheap bet.<\/p>\n
The shares have more than tripled from the company\u2019s IPO price, and now they trade at a 9.2 times sales ratio, according to Seeking Alpha.<\/p>\n
Additionally, it\u2019s trading at nearly 11 times trailing twelve-month cash flows, 47% above the sector median.\u00a0<\/p>\n
That is a remarkably rich multiple by traditional standards, even if AI infrastructure demand is still running hot and supply remains tight.<\/p>\n
On top of that, financing remains a critical long-term risk for CoreWeave, as I covered in my previous coverage.<\/p>\n
BofA estimates that the AI cloud giant might require $69 billion by 2028, while its counterpart Nebius might need a whopping $29 billion in external financing during the same period.\u00a0<\/p>\n
Both businesses are shelling out a ton of cash to expand AI infrastructure, taking on debt, with potential pricing pressure and hyperscaler competition complicating their bull case.\u00a0<\/p>\n
One of the biggest wild cards is the shift toward inferencing. Training demand tends to come in bursts, but inferencing is more persistent and grows with the user base of the AI applications it supports.<\/p>\n
If that trend continues, CoreWeave\u2019s revenue stream could prove more durable than the skeptics expect.<\/p>\n
Related: Goldman Sachs resets Broadcom stock forecast<\/p>\n
#Bank #America #tweaks #CoreWeave #stock #price #target<\/p>\n","protected":false},"excerpt":{"rendered":"
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