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CoreWeave is partnering with CrowdStrike to build cybersecurity directly into its cloud platform. CrowdStrike provides software that monitors for and blocks digital attacks, and CoreWeave will now offer these protections to customers running large-scale AI projects on its hardware.
This is a logical move for CoreWeave as it tries to win more business from large companies. These customers often hesitate to move sensitive data to specialized providers unless they have the same level of security found at giant rivals like Microsoft or Google. By making these tools a standard part of its service, CoreWeave removes a major hurdle for companies looking to rent its high-powered computer systems.
Source: Business Wire
CoreWeave and other specialized cloud companies saw their stock prices drop after Microsoft reported lower spending on things like data centers. This suggests that the big tech companies may be facing delays in getting new AI capacity up and running.
For CoreWeave, this is a trend to watch because its business model relies on building and renting out high-powered systems for these exact workloads. If the major players slow their pace of investment, it could signal a temporary cooling in the demand for the specialized infrastructure CoreWeave provides.
Source: CNBC
CoreWeave is scheduled to share its third quarter numbers on November 10. Analysts expect the company to report a loss of about $1.28 per share on revenue of $3.54 billion. The focus will likely be on the company's progress in building out its data center fleet. Investors will be looking for updates on whether its massive $99 billion backlog of signed contracts is translating into steady revenue growth as new facilities come online.
Raymond James set a price target of $75 for CoreWeave this week. This is significantly lower than the average analyst target of $129, reflecting a more cautious view of the company's near-term value. While the target is lower than many peers, it still sits above the current trading price. This move follows several other firms, including Morgan Stanley and UBS, who have also reduced their targets recently as the market weighs the high costs of building out AI data centers.
Source: Raymond James
UBS maintained its buy rating on the stock but lowered its price target to $105. This follows similar moves by other major firms this week, including Morgan Stanley and Piper Sandler, who also adjusted their targets downward. Even with these lower targets, the average analyst expectation of $130 remains more than double the current stock price.
Source: UBS
Management has a choppy record of hitting its own targets, with two beats and four misses in the last six quarters. This suggests the business is growing so fast that even the people running it cannot yet predict its path with certainty.
| Expectation | |
|---|---|
| EPS | $-1.27 |
| Revenue | $3.54B |