Evercore ISI Reiterates Outperform Rating On CoreWeave, Maintains $175 Price Target

Core View - Evercore ISI reaffirmed its Outperform rating and $175.00 price target on CoreWeave Inc., highlighting the company's strong unit economics and scalable business model despite profitability concerns in the GPU cloud sector [1] Investor Concerns - The firm addressed investor concerns regarding Oracle's GPU cloud margins, stating that CoreWeave's approach remains sustainable and profitable even with heavy depreciation [2] - Key factors supporting CoreWeave's economics include multi-year, noncancelable take-or-pay contracts averaging four to five years, prepayment structures covering 15–25% of total contract value, and near-total revenue from reserved capacity [2] Strategic Partnerships - CoreWeave's agreement with NVIDIA provides a safety net, obligating NVIDIA to purchase any unused GPU capacity through 2032 [3] - Management believes that GPUs can remain productive for over six years, citing ongoing use of older Volta units and demand for multi-year Grace Blackwell contracts [3] Financial Projections - Analysts estimate that a $3.2 billion total contract value deal could generate approximately $1 billion in capital expenditures, yielding 40–50% incremental EBIT margins and up to 70% incremental EBITDA margins once deployed [4] - CoreWeave's current mid-teens margin profile is attributed to aggressive reinvestment for growth, with expectations for material margin expansion as scale improves [4]