CoreWeave, Inc. (NASDAQ:CRWV) is one of the AI Stocks on the Market’s Radar. On December 4, Freedom Capital Markets initiated coverage on the stock with a “Buy” rating and a price target of $100.00. Firm analysts believe that CoreWeave’s stock plunge is largely fear-driven rather than based on fundamental deterioration. The firm elaborated how CoreWeave has been down -28% since its F25Q3 results were announced on November 10. This disappointment has been largely due to a 3% cut in prior guidance to full-y ...

Core Viewpoint - There are growing concerns about a potential AI bubble, particularly highlighted by OpenAI's recent financing deals with AI computing equipment providers that do not rely on cash or debt [1][2]. Group 1: AI Hyperscalers - Companies like Alphabet and Meta Platforms are not seen as part of the AI bubble due to their strong cash flows from core businesses, which provide a safety net for their AI investments [4][5]. - If an AI bubble were to burst, these companies would likely remain unaffected in the long term, as their primary revenue streams are not dependent on AI [5]. Group 2: AI Computing Equipment Providers - Concerns are primarily focused on AI computing equipment providers such as Nvidia, AMD, and Broadcom, which have recently engaged in significant deals with OpenAI [6]. - A cessation of AI spending could severely impact these companies, leading to a substantial decline in their business and stock performance [6][7]. - Companies like Taiwan Semiconductor and ASML would also face challenges if the AI bubble were to burst, as they are upstream suppliers to the aforementioned providers [6]. Group 3: Market Sentiment - There is uncertainty about whether the market is currently in an AI bubble, as the situation is complex and involves multiple players [7][8]. - Despite concerns, many companies in the AI sector are confident in their long-term visions and are willing to invest heavily to realize them [8].

Core View - CoreWeave, Inc. (NASDAQ:CRWV) has been upgraded by Wells Fargo analyst Michael Turrin from Equal Weight to Overweight, with a new price target of $170.00, up from $105.00, indicating strong confidence in the company's growth potential [1][3] Demand and Market Position - CoreWeave is expected to benefit from an elevated build cycle and ongoing hyperscale industry shortages that are projected to last until 2026, which may allow the company to capture additional market share [1][3] - The company has strong demand signals and major customers, which, combined with supply shortages and Nvidia's backing, position it as a significant growth winner in the AI sector [2][3] Strategic Backing - Nvidia's recent commitment to purchase all unused capacity through 2032 provides CoreWeave with a "blank check" to expand its operations and build new capacity for over six years [2][3] - The presence of major customers, including Microsoft and Google, further enhances CoreWeave's market position, with a notable $0.5 billion accounts receivable disclosure from a third unnamed customer, believed to be Google [3]