CoreWeave (CRVW) Stock Soars Friday: What's Driving The Action?

CoreWeave Inc (NASDAQ:CRWV) shares are up on Friday following a strong rebuttal from the company's CEO regarding its financing strategy. Here’s what investors need to know.

• CoreWeave stock is showing exceptional strength. What’s behind CRWV gains?

Dismissing Circular Financing

In a recent podcast, CEO Michael Intrator dismissed allegations of circular financing with Nvidia, labeling such claims as “ridiculous” and mathematically unsound. He emphasized that Nvidia’s $300 million investment is minimal compared to CoreWeave’s total capital of over $25 billion, which supports a valuation of $42 billion.

Intrator further explained that the company’s use of debt is managed through special purpose vehicles, ensuring that revenue from contracts with major clients like Microsoft and Meta Platforms is ring-fenced to cover operating expenses and lenders first. This structure is designed to mitigate risk and is comparable to traditional infrastructure financing methods.

TSMC's Blowout AI Chip Earnings

TSMC's blowout quarter is also lifting CoreWeave stock this week because both companies sit on the same AI supply chain, just at different layers.

TSMC is the main manufacturer of Nvidia's advanced AI GPUs. When it reports surging profit, raises long-term growth targets and commits tens of billions in new AI-focused capex, it's effectively saying that demand for AI chips from Nvidia, hyperscalers and AI labs is both huge and durable. That directly counters AI bubble fears.

As a key part of its business model, CoreWeave buys those Nvidia GPUs and rents them out as cloud compute under multi-year contracts with customers like OpenAI, Meta and Microsoft.

Its ability to grow depends on two things: that customers keep spending on AI and that Nvidia and TSMC can deliver enough chips to fill its data centers. TSMC's guidance likely reassures investors on both fronts.

Is CoreWeave Poised For A Breakout?

CoreWeave is currently trading 27.1% above its 20-day simple moving average (SMA) but is 1.3% below its 100-day SMA, indicating some short-term strength while showing longer-term weakness. Shares have increased by 152.00% over the past 12 months and are currently positioned closer to their 52-week highs than lows.

The RSI is at 62.18, which is considered neutral territory, suggesting that the stock is neither overbought nor oversold. Meanwhile, MACD is above its signal line, indicating bullish momentum.

The combination of neutral RSI and bullish MACD suggests mixed momentum.

• Key Resistance: $105.50
• Key Support: $85.00

Analysts Split On Future Price Targets

Investors are looking ahead to the next earnings report on February 14.

• EPS Estimate: Loss of 65 cents
• Revenue Estimate: $1.54 billion

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $125.52. Recent analyst moves include:

• Barclays: Equal-Weight (Lowered Target to $90.00) (Jan. 12)
• Wells Fargo: Overweight (Lowered Target to $125.00) (Jan. 8)
• Truist Securities: Initiated with Hold (Target $84.00) (Jan. 6)

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for CoreWeave, highlighting its strengths and weaknesses compared to the broader market:

• Momentum: Bullish (Score: 83/100) — Stock is outperforming the broader market.
• Value: Neutral (Score: 71/100) — The stock is fairly valued compared to its peers.

The Verdict: CoreWeave’s Benzinga Edge signal reveals a classic ‘High-Flyer’ setup. While the Momentum score confirms the strong trend, the neutral Value score suggests that the stock is fairly priced, indicating potential for continued growth without being overvalued.

Top ETF Exposure

• Tradr 2X Long CRWV Daily ETF (NASDAQ:CWVX): 118.53% Weight
• iShares US Digital Infrastructure and Real Estate ETF (NYSE:IDGT): 4.65% Weight
• REX IncomeMax Option Strategy ETF (NASDAQ:ULTI): 5.05% Weight

Significance: Because CRWV carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

CRWV Stock Surges Friday

CRWV Price Action: CoreWeave shares were up 6.33% at $101.02 at the time of publication on Friday, according to Benzinga Pro data.

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