CoreWeave Stock Fighting Back Pre-Market as Analyst Raises Price Target

CoreWeave's stock (NASDAQ: CRWV) is up 2,8% in the pre-market, fighting back from a two day decline that topped 8%. The dip in stock value was attributed to the company's significant capital spending plan, which overshadowed an impressive revenue performance in the first quarter.

Such was the volatility, that upon earnings being released, CoreWeave's stock saw a 10% increase in after-hours trading, only to fade over the coming days. The early boost in sentiment was spurred by a remarkable 420% year-over-year rise in first-quarter revenue, reaching $981.6 million, significantly surpassing the consensus estimate of $853 million.

However, investor enthusiasm was dampened by the company's announcement of its aggressive capital expenditure strategy. CoreWeave projects its full-year capital spending to range between $20 billion and $23 billion, exceeding the market's anticipated $18.4 billion. For the second quarter alone, the company expects capital expenditures to fall between $3 billion and $3.5 billion.

Coreweave's stock has a mixed view on street, with the lowest analyst target price being $36, and a high of $85. Goldman Sachs analysts have upped Coreweave's price target to $61 from $54 whilst keeping a Neutral rating on the stock, whilst Needham have today increased their price target to $75. The consensus of $63.56 sits below current price action, with the street slowly re-evaluating their view on the back of recent results.

Another potential piece of bullish news recently came as the firm secured a strategic partnership with OpenAI, valued at up to $11.9 billion, also expanding its client base, which includes major players like Google and Microsoft.

CoreWeave is actively working to diversify its business, aiming to reduce heavy reliance on a few large clients. This strategic shift is essential as the company aims to stabilise and enhance its market position amid evolving industry dynamics.