CoreWeave Soars on Nvidia Ties and Rising Cloud Demand

Analysts at Morningstar are optimistic about CoreWeave's (CRWV) growth prospects, citing its close relationship with Nvidia Corp. (NVDA) as a key factor in its success. This integration makes CoreWeave a go-to choice for customers, according to the analysts.

Morningstar also downplayed concerns over Meta Platforms Inc.'s (META) planned move into cloud computing, stating that it reinforces the AI compute boom rather than signaling a weakening market. The firm estimates U.S. cloud computing revenue will exceed $1 trillion before 2030, creating a long runway for both hyperscalers and specialized AI cloud providers.

CoreWeave's long-term growth will hinge less on winning new contracts than on delivering computing capacity on schedule, Morningstar said. The firm identified land, power, and equipment constraints as the biggest near-term risks for AI infrastructure providers, warning that delays could cause companies to miss revenue targets and lose market share.

Morningstar has a fair value estimate of $106 on CoreWeave shares, implying an upside potential of about 31% from current levels. The firm agrees with CoreWeave management's long-term outlook that its adjusted operating margin can reach 25-30%, similar to other AI cloud providers.