CoreWeave Pulls Back Into a Screaming Buy

Core Viewpoint - CoreWeave's Q2 results showed a widening adjusted net loss, but this is attributed to the company's investment in scaling its business to meet the high demand for cloud-native AI compute capacity, indicating that the spending is justified [1][4] Financial Performance - Revenue grew by 210.3% year-over-year to $1.21 billion, driven by strong demand and execution, particularly leveraging NVIDIA's ecosystem [3] - The company is experiencing a revenue pipeline with over 500% annualized growth relative to Q2 results, indicating robust future prospects [2] - Despite a 600 basis point contraction in operating margin and a 1000 basis point increase in operating loss, the overall outlook remains positive as increased AI spending is expected to lead to better financial results [4] Future Outlook - CoreWeave has raised its revenue guidance for Q3 and the full year, suggesting ongoing strength and potential outperformance of targets [5] - Analysts forecast a high double-digit revenue CAGR through the end of the decade, with earnings expected to grow significantly faster [2] Market Position - The stock price forecast for CoreWeave is set at $92.70, indicating a potential downside of 28.93% from the current price of $130.44, with a high forecast of $200.00 and a low of $32.00 [7] - The company has seen a 37% increase in long-term debt, but this is offset by increased cash and total assets, maintaining a low long-term debt leverage of 2.8x equity [7] Stock Performance - CoreWeave's stock experienced a 50% increase from late July to mid-August, but analysts suggest caution as the consensus price targets indicate a potential downside from early August highs [10][11] - The stock pulled back nearly 10% in premarket trading following the earnings release, with critical support near the 30-day EMA at $125 [11][12]