Key Points
- Shares of CoreWeave declined 14% Wednesday followed by an additional 5.5% drop Thursday, reaching $80.97
- Reports emerged via Bloomberg that Meta Platforms is considering launching cloud services to monetize surplus AI computing capacity
- CoreWeave counts Meta as one of its largest clients
- SoftBank revealed intentions to establish a U.S. AI cloud platform called SB Neo
- Despite the selloff, Rosenblatt Securities reaffirmed its Buy recommendation with a $250 price objective
Shares of CoreWeave (CRWV) experienced significant downward pressure throughout the week. The artificial intelligence cloud infrastructure provider saw its stock price decline 14% during Wednesday’s trading session, followed by an additional 5.5% decrease on Thursday, settling at $80.97. The two-day decline erased more than $7.5 billion in shareholder value.
CoreWeave, Inc. Class A Common Stock, CRWV
The catalyst behind the sharp downturn was a Bloomberg article suggesting that Meta Platforms is evaluating the possibility of commercializing its surplus AI computational resources by offering them to external organizations — essentially positioning itself as a potential competitor in the neocloud space where CoreWeave currently operates.
The development is particularly problematic for CoreWeave given that Meta represents one of its most significant clients, creating a scenario where a major revenue source could transform into a direct rival.
CoreWeave responded to the market concerns with an official statement: “We’re continuing to see incredibly strong demand across a growing and increasingly diverse customer base, including Meta who is a great customer and partner of CoreWeave’s.”
The company further emphasized its view that the expanding AI infrastructure investment landscape represents “a rapidly expanding market, not a zero-sum game.”
The market reaction wasn’t isolated to CoreWeave alone. Competitor Nebius experienced similar downward price movement following the Meta reports, indicating broader sector-wide apprehension rather than company-specific concerns.
Bullish Analyst Perspective Emerges
While many investors headed for the exits, at least one prominent research firm sees opportunity in the chaos. Rosenblatt Securities analysts John McPeake and Tanu Chauhan issued a note Wednesday evening characterizing the market reaction as “a buying opportunity.”
Their research highlighted persistent robust demand for GPU computing capacity, noting that supply constraints remain widespread throughout the industry. The analysts also emphasized an important contractual consideration — Meta likely lacks the legal authority to resell computing capacity it has contracted from CoreWeave through 2032 to external parties.
Rosenblatt reaffirmed its Buy recommendation and maintained its $250 price objective, implying potential appreciation of approximately 209% from current price levels.
Wall Street consensus presents a more cautious outlook. Among 35 analysts tracking the stock, 21 maintain Buy ratings, 12 recommend Hold, and 2 rate it Sell. The average price target stands at $135, representing roughly 58% upside from present trading levels.
SoftBank Announcement Compounds Pressure
Compounding Thursday’s selling pressure, SoftBank revealed plans to establish its own artificial intelligence cloud infrastructure business in the United States, preliminarily named SB Neo. This announcement introduces yet another prospective competitor in the market segment CoreWeave has been cultivating.
Year-to-date, CoreWeave stock has advanced just 13%, but over a twelve-month period, shares have plummeted 51%. The stock has traded within a 52-week range spanning from $63.80 to $166.22.
The company’s most recent quarterly results, released May 7, revealed revenue of $2.08 billion — representing year-over-year growth of 111.6%. However, CoreWeave fell short on profitability metrics, reporting a per-share loss of $1.40 compared to analyst expectations of a $1.17 loss.
Insider trading activity has drawn attention from market watchers. During the previous 90-day period, company insiders have divested more than 26.5 million shares valued at over $3 billion.
On the institutional investment front, Vanguard substantially expanded its stake during the fourth quarter, increasing its holdings by 275.6% through the acquisition of an additional 20.4 million shares.
CoreWeave stock commenced Thursday’s session at $85.68, with the company maintaining a market capitalization of $38.35 billion.
