Shares of artificial intelligence infrastructure company CoreWeave (NASDAQ: CRWV) were trading roughly 7% higher, as of 11:05 a.m. ET today. The stock rose along with the broader market, which surged due to positive macro and tariff-related news. It also comes after numerous analysts recently issued bullish ratings on the company.
Wall Street likes what they see
At least a dozen analysts kicked off coverage of CoreWeave yesterday, with seven assigning buy or equivalent ratings and five saying hold. The company runs data centers with Nvidia's graphics processing units, specifically for companies looking to run AI applications without having to build out the infrastructure themselves.
CoreWeave had arguably been the most hyped initial public offering of the year, but disappointed in its debut, pricing below its target of $40 per share. AI stocks have largely disappointed this year and CoreWeave's stock has been volatile since going public. Still, many analysts see a lot of runway ahead.
"We believe we're still in the very early innings of this build-out for AI, and CoreWeave being one of the few who has been able to scale and host AI compute reliably, is positioned well to capture this opportunity," Jefferies analyst Jeffrey Thill said in his initiation report. "While there are concerns over the durability of CRWV's business model, we believe that the unrelenting appetite for AI compute minimizes the downside risks."
An interesting way to play AI
CoreWeave offers an interesting way to play the AI trade because it makes it easier for companies to delve into AI. Right now, Coreweave's customer base is heavily concentrated, which does present a risk.
But if you believe AI is the future, then CoreWeave should be a part of that future. However, the company already has a high market cap and there could be several bumps along the way in the AI journey. For this reason, I'd recommend keeping positions in CoreWeave smaller for now.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group and Nvidia. The Motley Fool has a disclosure policy.
