CoreWeave Hits 52-Week Low as Bernstein, Morgan Stanley and UBS Cut Targets on Funding Risk

CRWV fell 10% on Thursday, October 22, after Bernstein analyst Madison Rezaei cut her price target to $51 from $74 and kept an Underperform rating, saying that barring major moves the fundamentals are probably stuck. The stock settled at $55.60, a new 52-week low 8.6% under its prior floor from late July. Other neocloud names fell with it: Nebius dropped 7%, IREN 8% and Applied Digital 9%.

More cuts followed on Friday. Morgan Stanley lowered its target to $70 from $99 and kept an Equal-weight rating, estimating that CoreWeave may need $24 billion to $37 billion of new debt to reach about 3.3 gigawatts of active capacity by the end of 2027, and noting that its bond spreads have widened by about 300 basis points on average since late August. UBS cut its target to $105 from $120 while reiterating its Buy rating. Investing.com put the stock's October decline at 37%.

Leverage is the core of the bear case. Total debt rose from $2 billion at the end of 2023 to $29.8 billion two years later, and the company's unsecured debt yields about 15%. MarketBeat puts the debt-to-equity ratio at 5.53 and counts 5,352,578 shares sold by insiders over the past 90 days, worth about $471.8 million. Short interest has climbed to 23.7% of free float from 19.6% at the start of October.

The Street has not turned uniformly. MarketBeat's tally still shows a Moderate Buy consensus with a $130.31 average target, though individual views run from HSBC's $39 Reduce to Citigroup's $159 Buy, and revenue grew 112.5% year over year in the latest quarter. As of 1:23 p.m. ET Friday, CRWV was down another 1.6% at $54.70. Third-quarter results due in November are the next test of whether growth can outrun the funding bill.