Key Takeaways
- Bernstein launched coverage of CoreWeave with an underperform rating and $56 price objective
- Shares closed Wednesday near $79.50 — significantly higher than the analyst’s target
- Madison Rezaei from Bernstein believes hyperscalers will avoid signing additional major agreements with CRWV
- CNBC’s Jim Cramer advised investors to consider NVIDIA instead of CoreWeave
- In January, NVIDIA placed a $2 billion investment in CoreWeave, acquiring 22.9 million shares priced at $87.20 per share
Shares of CoreWeave declined 2% on Thursday following a bearish analyst report from Bernstein, compounded by Jim Cramer’s public preference for NVIDIA over the cloud infrastructure provider.
CoreWeave, Inc. Class A Common Stock, CRWV
Madison Rezaei, an analyst at Bernstein, established a $56 price objective for CRWV — representing approximately 30% downside from Wednesday’s closing price of $79.50.
While Rezaei recognized that CoreWeave has successfully captured demand for GPU computing resources, questions remain about the company’s future trajectory.
“Given the abundance of alternatives available, we believe hyperscalers lack sufficient incentive to execute additional substantial contracts with CRWV,” Rezaei stated in the report.
The fundamental bearish thesis centers on a straightforward premise: major cloud infrastructure providers such as AWS, Microsoft Azure, and Google Cloud are more inclined to develop their own competing capabilities rather than continue relying on CoreWeave’s services.
“Hyperscalers will likely pursue direct competition, targeting the GPU cloud market as a logical extension of conventional cloud services, thereby eroding CRWV’s addressable market,” the analyst explained.
Rezaei further noted that as overall compute capacity availability improves, CoreWeave could face mounting competitive threats from these well-established cloud giants.
The timing of this research note proved particularly challenging for CRWV, as the stock has been swept up in broader technology sector turbulence throughout the week.
Cramer’s Take on CoreWeave
During Thursday’s broadcast, a caller asked Cramer whether CRWV’s recent price decline presented a purchase opportunity.
Cramer expressed skepticism. “Man, you are going into the lion’s den,” he responded. “I’d rather have you buy NVIDIA.”
He referenced multiple favorable developments for NVIDIA over the preceding three days as justification for his preference toward the semiconductor leader.
Cramer did acknowledge an important chapter in CoreWeave’s narrative. On January 26, he noted that NVIDIA had committed an additional $2 billion investment into CoreWeave, purchasing 22.9 million shares at $87.20 apiece.
Cramer characterized this move as “a fantastic verification for CoreWeave” at the time, positioning the company as NVIDIA’s preferred distribution channel for clients unable to secure GPU allocations directly.
Understanding NVIDIA’s Major Investment
NVIDIA’s substantial financial commitment continues to be a central element of CoreWeave’s investment narrative.
CEO Jensen Huang joined CoreWeave’s Michael Intrator on CNBC’s Squawk on the Street to elaborate on the partnership and investment details.
This capital infusion demonstrated that CoreWeave occupies a strategic position within the AI infrastructure ecosystem — serving as a critical conduit for NVIDIA hardware to reach enterprises that lack direct access.
However, Bernstein’s analysis suggests this competitive moat may erode as industry dynamics evolve.
CRWV shares retreated 2% on Thursday amid widespread selling pressure across technology stocks. With Wednesday’s close at $79.50, Bernstein’s $56 price target implies approximately 30% potential downside from current levels.
