TLDR
- Bernstein launched coverage of CoreWeave with an underperform rating, setting a $56 price target
- Shares traded near $79.50 at Wednesday’s close — significantly above the analyst’s target
- Madison Rezaei from Bernstein expressed concerns that hyperscalers won’t execute additional major agreements with CRWV
- CNBC’s Jim Cramer advised his audience to purchase NVIDIA rather than CoreWeave
- In January, NVIDIA made a $2 billion investment in CoreWeave, acquiring 22.9 million shares priced at $87.20 per share
CoreWeave shares experienced a 2% decline Thursday following a bearish call from Bernstein, compounded by Jim Cramer’s recommendation that investors choose NVIDIA over the GPU cloud provider.
CoreWeave, Inc. Class A Common Stock, CRWV
Madison Rezaei, analyst at Bernstein, established a $56 price target for CRWV — representing approximately 30% downside from Wednesday’s closing price of $79.50.
While Rezaei recognized that CoreWeave has successfully leveraged demand for GPU computing resources, questions remain about the company’s future trajectory.
“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 thesis is clear: major cloud infrastructure providers including AWS, Microsoft Azure, and Google Cloud are increasingly likely 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 further noted that as computing capacity becomes more readily available across the market, competitive threats from established cloud giants could escalate.
The timing of Bernstein’s report proved challenging for CoreWeave, as the stock has already been impacted by broader technology sector volatility throughout the week.
Jim Cramer Weighs In
During Thursday’s broadcast, a viewer contacted Cramer’s program questioning whether CRWV’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 multiple favorable developments for NVIDIA over the previous three days as justification for his preference toward the semiconductor leader.
Cramer also recalled an important chapter in CoreWeave’s narrative. On January 26, he emphasized that NVIDIA had committed an additional $2 billion to CoreWeave, purchasing 22.9 million shares at $87.20 apiece.
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 pivotal component of CoreWeave’s corporate story.
Jensen Huang made an appearance on CNBC’s Squawk on the Street with CoreWeave CEO Michael Intrator to elaborate on the transaction.
The investment demonstrated CoreWeave’s strategic role within the AI infrastructure ecosystem — functioning as a distribution channel for NVIDIA processors to customers lacking direct access.
However, Bernstein’s assessment suggests this competitive edge could diminish as market dynamics evolve.
Shares declined 2% Thursday amid widespread technology sector pressure. With CRWV closing Wednesday at $79.50, Bernstein’s $56 price target implies approximately 30% downside risk from current levels.
