Wall Street analysts on Tuesday doled out mixed buy/hold ratings to Nvidia-backed CoreWeave, a new artificial intelligence cloud computing services provider that rents out Nvidia chip-equipped servers. CoreWeave stock rose amid the coverage initiations.
At least 12 Wall Street analysts started coverage of CoreWeave stock on Tuesday. Seven gave the company buy or similar ratings while five issued neutral or similar ratings. While some analysts project a big AI market opportunity for CoreWeave, others fret about customer concentration and debt.
Bank of America analyst Brad Sills rated CoreWeave stock a buy.
"We believe that CoreWeave is well positioned to capture share of the $79 billion AI IaaS (infrastructure as a service) market given its rapid GPU deployment cycle; proprietary software optimized for AI workloads; and strategic relations with top-tiered AI-native companies such as Nvidia, Microsoft, Meta Platforms and OpenAI," he said in a report.
CoreWeave Stock IPO Disappoints
On the stock market today, CoreWeave stock rose more than 5% to 37.30. With Tuesday's gain, CoreWeave shares still trade below the IPO offering, which was priced at 40. CoreWeave launched its IPO in late March, just before Trump administration trade tariffs rattled stock markets. Also, CoreWeave stock has a relatively small float, making it more volatile.
Further, Nvidia stock on Tuesday rose 2% to near 99. Nvidia owns 5% of CoreWeave and is a strategic partner. CoreWeave builds out its own data centers.
Jefferies analyst Brent Thill initiated coverage of CoreWeave stock with a buy rating.
"We believe we're still in the very early innings of this build-out for AI, and CoreWeave being one of the few who has been able to scale and host AI compute reliably, is positioned well to capture this opportunity," Thill said in a report. "While there are concerns over the durability of CRWV's business model, we believe that the unrelenting appetite for AI compute minimizes the downside risks."
At Deutsche Bank, analyst Brad Zelnick started coverage of CoreWeave stock with a neutral rating.
Customer Concentration
In a report, Zelnick in part focused on customer concentration. He noted that 77% of CoreWeave's 2024 revenue came from two customers, with Microsoft accounting for 60%.
"CoreWeave's customer concentration is unique not only in its magnitude, but also that it's largest current customer (Microsoft) is a competitor and has right of first refusal on new capacity for what we anticipate will be its second largest customer starting in second half 2025 (OpenAI)," Zelnick said. "As it relates to Microsoft, we believe this creates elevated event risk around expiration/renewal dates that while still several years out likely remains an overhang."
Meanwhile, Microsoft is the biggest investor in generative AI startup Open AI, which is the leader in building AI models and launched ChatGPT.
New rivals to cloud giant Amazon.com, CoreWeave and the other cloud infrastructure startups rent Nvidia-chip equipped computer servers to artificial intelligence app developers. CoreWeave was founded as a cryptocurrency miner in 2017 before its move into cloud computing services.
Nvidia Stock Falls In 2025
Morgan Stanley analyst Keith Weiss holds an equal-weight rating on Coreweave stock.
"A strong domain expertise in efficiently building and operating the GPU clusters has enabled CoreWeave to build a $25 billion book of business in under five years, a pace of scaling formerly unheard of in software," he said in a report. "However, the unique business model CoreWeave has built to execute on this build-out also brings some material risks, including a high debt load (expected to expand to $32 billion by the end of 2026, significant customer concentration and an increasing level of competition."
While there's always a tight supply of Nvidia AI chips, CoreWeave and others stand out by their ability to buy Nvidia devices, including its newest Blackwell accelerators.
For Nvidia stock, ramping up production of next-generation Blackwell AI chips in 2025 has been a key issue. Nvidia stock has retreated 27% in 2025.
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