CoreWeave (NASDAQ:CRWV) has ridden the artificial intelligence (AI) wave to new heights since its March IPO, with shares surging 322% from an initial post-IPO low of around $33 per share to its current level near $140 per share.
This explosive growth reflects the company’s pivot from crypto mining to a specialized cloud provider for GPU-intensive AI workloads, capitalizing on surging demand for compute power. But with a market cap now exceeding $70 billion and analysts projecting a total addressable market (TAM) of $400 billion by 2028, can CRWV realistically continue climbing to $400 per share by then, implying nearly a tripling from here?
That would push its valuation toward $229 million, a lofty target in a sector dominated by giants like Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT),so let’s see if there is anything that could derail its rally.
From Crypto Bust to AI Boom
CoreWeave started life in 2017 as Atlantic Crypto, mining Ethereum with racks of GPUs, but the real acceleration hit in 2024, driven by deals with AI labs and enterprises needing scalable compute without building their own data centers. Revenue jumped from $229 million in 2023 to $1.9 billion.
The March IPO priced at $40 per share but debuted flat at $23 billion valuation amid market jitters. Shares bottomed at $33 in April before rocketing 322% on AI hype, peaking at $187 per share in June. Today, at $141, CRWV trades at a forward price-to-sales multiple of about 13x on 2025 revenue guidance of $5 billion — steep, but below peers like Snowflake (NYSE:SNOW) at just under 18x.
Key to this run has been its strategic partnerships. Nvidia (NASDAQ:NVDA) — CoreWeave’s top backer — signed a $6.3 billion capacity deal in September, guaranteeing to buy unsold cloud resources. This backstop addresses fears of overbuild, especially after Q2 operating expenses ballooned to $1.19 billion on data center expansions. CoreWeave now runs 33 facilities across the U.S. and Europe, with 420 megawatts active and 1.6 gigawatts contracted long-term.
Massive Backlog Fuels the Growth Engine
CoreWeave’s first-quarter results lit a fire under the stock. Revenue soared 420% year-over-year to $982 million, beating estimates, with a backlog swelling to $26 billion — 63% higher than a year ago. That’s more than five times the full-year revenue forecast, signaling multi-year visibility.
Microsoft, which accounted for 62% of 2024 sales, expanded its relationship, while a five-year, up-to-$11.9 billion pact with OpenAI locked in demand for GPU clusters.
Revenue hit a record in Q2, with guidance for $5.1 billion to $5.3 billion for the fully, implying 174% growth, thanks to new wins like Meta Platform‘s (NASDAQ:META) $14.2 billion commitment and IBM (NYSE:IBM) using CoreWeave’s Nvidia GB200 systems for its Granite AI model.
Acquisitions bolster the growth story, and these moves position CoreWeave as the “AI Hyperscaler.” Early access to Nvidia’s Blackwell chips gives it an edge in training next-gen models, and analysts expect revenue to compound at 80% to 100% annually through 2027.
A Path to Triple-Digit Gains?
Hitting $400 by 2028 requires sustained execution. Analysts’ consensus 12-month price targets put CRWV at $141 per share, with highs of $234, implying 64% upside. Scaling to $400 assumes 50% CAGR in earnings, fueled by 100,000 GPU mega-clusters and efficiency gains. Nvidia’s stake de-risks its capacity, and diversification beyond Microsoft and OpenAI (now under 50% of CoreWeave’s backlog) adds stability.
Yet bears point to capex jumping to $20 billion to $23 billion this year, straining the balance sheet and free cash flow. Q1 losses missed estimates at $0.27 versus $0.23 per share expected. Customer concentration remains high, and incumbents like AWS are ramping AI offerings.
However, CoreWeave’s debt load — over $10.6 billion, including operating leases — may balloon with expansions, risking dilution if rates stay elevated. GPU supply chains that are 90% dependent on Nvidia, face potential bottlenecks as any delays in Blackwell rollouts could crimp growth. Regulatory scrutiny on AI energy use also looms, with CoreWeave’s data centers guzzling power equivalent to small cities.
Google and Oracle (NYSE:ORCL) are eyeing specialized clouds, potentially eroding CoreWeave’s moat, and if AI hype cools, its backlog could stall. A 20% pullback isn’t off the table if it misses Q3 estimates.
Key Takeaway
CoreWeave embodies AI’s infrastructure gold rush, with metrics indicating significant growth. A $400 per share target by 2028 isn’t a pipe dream if execution holds — backlog conversion and partnerships could drive 150% returns or better — but it would take near-perfect execution with no hiccups.
The AI cloud leader looks well on the path to higher highs, but investors should not get out of their skis in expecting CRWV to 3x in three years.
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