Rothschild Redburn Sets $54 Target on CoreWeave, Sees 37% Downside

Rothschild & Co Redburn began coverage of CoreWeave with a Sell rating and a $54 price target on Monday, September 21. The target is about 37% below the stock’s $85.43 closing price that day.

The call reflects concern about the funding behind the AI infrastructure boom, not just CoreWeave’s near-term sales. Redburn argues that credit markets are starting to price risks that equity investors have largely overlooked.

The firm points to major cloud companies’ off-balance-sheet commitments. Counting those obligations, it says, reveals greater economic leverage and may leave hyperscalers with less room to support another wave of data-center spending.

That matters to CoreWeave because it rents computing power built around advanced chips to customers developing and running AI. If large cloud providers curb spending, demand for outside computing capacity could weaken, even as AI use grows.

CoreWeave’s latest reported quarter showed rapid expansion. Revenue more than doubled from a year earlier to $2.575 billion in the second quarter, but operating expenses reached $2.624 billion, leaving a $49 million operating loss.

Interest expense added another pressure point. The company reported a $626 million net loss for the quarter, including $640 million in net interest expense.

CoreWeave reported about $104 billion in revenue backlog at June 30, and said it added more than $25 billion in customer commitments early in the third quarter. The company cautions that fulfilling those contracts depends on delivering infrastructure and making services available.

Investors will weigh that demand against the cost and pace of building capacity. Future results will show whether CoreWeave can turn its large contract pipeline into revenue and profit without relying on increasingly expensive financing.