TLDR
- Bernstein launched coverage of CoreWeave with an underperform rating and $56 price objective
- Shares were hovering near $79.50 at Wednesday’s close — significantly above the analyst’s target
- Madison Rezaei from Bernstein believes hyperscalers won’t extend large-scale agreements with CRWV
- Jim Cramer advised viewers that purchasing NVIDIA would be a better choice than CoreWeave
- NVIDIA made a $2 billion investment in CoreWeave during January, acquiring 22.9 million shares at $87.20 per share
Shares of CoreWeave fell 2% on Thursday following a bearish rating from Bernstein, compounded by Jim Cramer’s preference for NVIDIA over the cloud infrastructure provider.
CoreWeave, Inc. Class A Common Stock, CRWV
Madison Rezaei, an analyst at Bernstein, established a $56 price objective for CRWV — representing approximately 30% downside from Wednesday’s closing price of $79.50.
While Rezaei recognized that CoreWeave has successfully leveraged strong demand for GPU computing resources, questions remain about the company’s future prospects.
“With a plethora of options, we do not believe hyperscalers will be incentivized to sign further large contracts with CRWV,” Rezaei wrote.
The fundamental bearish argument is simple: major cloud infrastructure companies including AWS, Microsoft Azure, and Google Cloud are expected to develop their own competing capabilities rather than continue outsourcing to CoreWeave.
“Hyperscalers are more likely to attempt head-on competition, going after GPU cloud business as the natural adjacency to traditional cloud, and cannibalizing CRWV’s market,” Rezaei added.
Rezaei also noted that as overall compute capacity markets normalize, CoreWeave could face heightened competitive threats from these larger cloud service providers.
The timing of Bernstein’s report proved challenging for CRWV, as shares were already experiencing downward pressure amid broader technology sector volatility.
Jim Cramer Weighs In
During Thursday’s broadcast, a caller asked Cramer whether CoreWeave’s recent price decline presented an attractive entry point.
Cramer expressed skepticism. “Man, you are going into the lion’s den,” he said. “I’d rather have you buy NVIDIA.”
He referenced several favorable developments for NVIDIA over the previous three days as justification for preferring the semiconductor leader.
Cramer also recalled an important element of CoreWeave’s narrative. On January 26, he noted that NVIDIA had made an additional $2 billion investment in CoreWeave, purchasing 22.9 million shares at a price of $87.20 each.
At the time, Cramer called it “a fantastic verification for CoreWeave,” describing the company as NVIDIA’s preferred chip distribution partner for customers who can’t get direct GPU allocations.
NVIDIA’s $2 Billion Bet
NVIDIA’s substantial investment continues to be a central component of the CoreWeave investment thesis.
Jensen Huang made an appearance on CNBC’s Squawk on the Street with CoreWeave CEO Michael Intrator to elaborate on the partnership.
The capital injection demonstrated that CoreWeave occupies a strategic position within the AI infrastructure ecosystem — serving as a distribution channel for NVIDIA processors to customers who lack direct access.
However, Bernstein’s perspective suggests this competitive moat could erode as market dynamics evolve.
CRWV shares declined 2% on Thursday amid widespread selling pressure across technology stocks. With Wednesday’s close at $79.50, Bernstein’s $56 price target implies approximately 30% potential downside from current levels.
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