CoreWeave could be in big trouble in the near future, according to HSBC. The firm initiated coverage of CoreWeave with a reduce rating and a $32 per share price target. signals for more than 77% downside from Wednesday’s close. Analyst Abhishek Shukla said that because most of CoreWeave’s revenue comes from only a few customers that also use their own software, thus diluting its “value proposition.” CRWV YTD mountain CoreWeave stock in 2025. “CoreWeave’s key customers, namely Microsoft, Open AI, and Nvidia, do not use CoreWeave’s software services, according to SemiAnalysis,” the analyst said. “We believe this diminishes the competitive advantage and customer lock-in CoreWeave gets from its unique offering. In 1Q25, 72% of CoreWeave’s revenue came from Microsoft. Microsoft and Open AI together account for the vast majority of the company’s backlog.” The analyst also said CoreWeave stock is overvalued. Indeed, shares have skyrocketed more than 240% since the company went public in late March. Other headwinds are higher borrowing costs, low asset turnover and expected high capital expenditure costs due to the short shelf life of graphic processing units, Shukla said. “Assuming that GPUs will need to be replaced after 6-7 years of use, the result would be high capex simply to maintain steady-state revenue beyond 2030e,” the analyst said. “The continued high capex requirement well beyond the high-growth phase of the company is one of the key reasons behind our low [discounted cash flow] valuation of CoreWeave.” Shares fell more than 3% after the downgrade. Most analysts aren’t sold on Coreweave despite its massive gains since going public. LSEG data shows that 17 of 23 analysts covering the stock rate it as a hold, while only four have buy or strong buy ratings. Another two have underperform ratings.
