CoreWeave (CRWV) reported a Q2 beat and raised guidance, with inference demand driving upside despite higher near-term capital expenditures, Oppenheimer said in a note Wednesday.
The company's inference services platform grew more than 100-fold in just a few months as incremental capacity was allocated to inference, driving better revenue-per-megawatt economics, the analysts said.
They added that they expect higher revenue/MW, faster-than-expected capacity additions, and longer server useful lives to provide further upside.
The analysts said the main negative is the higher capital expenditures outlook, which puts near-term pressure on free cash flow and operating margins as capacity is added ahead of the related revenue.
"Still, the strong growth outlook and market positioning clearly outweigh the near-term investment needs," they added.
Oppenheimer reiterated its outperform rating and $150 price target on CoreWeave.
The company's shares rose nearly 18% in the session.
Price: $106.31, Change: $+15.99, Percent Change: +17.70%