CoreWeave (CRWV) is faced with cautious market sentiment despite "outstanding" AI compute demand signals and strong evidence that its revenue per gigawatt metric will march higher, UBS said in a note Tuesday.
"We respect the concerns (primarily leverage/credit risk) but conclude that they're peaking," the report said. "We are making a non-consensus positive call with a Buy rating."
The report said the Street may be under-appreciating the strength and durability of AI compute demand, GPU pricing trends, and the fact that the firm has established a reputation for reliability and performance that distinguishes it from peers.
The note also pointed to "depressed" sentiment, with the stock trading at just three times revenue, well below that of peers such as DigitalOcean (DOCN) and Nebius (NBIS).
"These multiples are attractive for a company with 112%
revenue growth facing material AI demand," the note said. UBS set a price target of $120.
Price: $88.20, Change: $+1.44, Percent Change: +1.66%