HSBC Cuts CoreWeave (CRWV) Price Target, Flags High Funding Needs and Rising Debt Costs

CoreWeave, Inc. (NASDAQ:CRWV) is one of the Buzzing AI Stocks on Wall Street. On January 28, HSBC analyst Abhishek Shukla lowered the price target on the stock to $41.00 (from $44.00) while maintaining a Reduce rating. The firm believes that CoreWeave’s ongoing funding needs and high cost of capital may impact long-term productivity.

The firm has increased its interest cost estimates for CoreWeave due to a 250 basis points widening in the company’s credit default spread (CDS) spreads by the third quarter of 2025. This implies that the company will need to pay more than 10% yield for raising fresh debts. In 3Q25, CoreWeave was able to raise fresh debt at about 9% effective interest rate for the company, an assumption which the firm no longer views as sustainable.

HSBC noted that while the company’s January 2026 $2 billion equity from Nvidia and its December issuance of 1.75% convertible notes may help put a lid on near-term interest costs, CRWV still likely faces a liquidity shortfall of USD 8.9 billion in 2026e.

As a result, the firm believes that the company will likely need to borrow more funds at current higher yields, in turn increasing its effective cost of debt.

“Consensus continues to assume that the effective interest rate on debt for CoreWeave will dip to 7.7% in 2029e from 9.9% in 3Q25. We lower our 2027-30e non GAAP EPS estimates by 12-33% (on a very low base) due to higher interest expense. 2026e non-GAAP EPS, however, rises to USD0.15 (from negative USD0.06) on lower debt. Our 2027-30e non-GAAP EPS estimates remain 58-92% below consensus.”

CoreWeave, Inc. (NASDAQ:CRWV) is a cloud platform provider that provides equipment for AI and other computing purposes.

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