Shares of CoreWeave Inc (NASDAQ:CRWV) tanked in early trading on Monday. The cloud computing company is heavily dependent on debt financing, according to DA Davidson analyst Gil Luria.



The CoreWeave Analyst: Luria assumed coverage with a Neutral rating and slashed the price target from $175 to $100.



The CoreWeave Thesis: This could be &#34;a good time to be balanced,&#34; Luria said in the note. Citing the positives:



<ul>
<li>The AI cloud category has strong prospects, as demand for compute power is unlikely to change any time soon.</li>



<li>CoreWeave has reduced &#34;concentration risk,&#34; aided by continued investments from Nvidia Corp (NASDAQ:NVDA) and customers like Microsoft Corp (NASDAQ:MSFT), OpenAI and Meta Platforms Inc (NASDAQ:META), among others.</li>
</ul>



Check out other analyst stock ratings.



CoreWeave is among &#34;the least profitable clouds,&#34; Luria says. It generates only 1% adjusted EBIT margin on annual revenues of around $8 billion. This becomes a greater concern as input prices continue to rise, he noted.



While CoreWeave assumed some margin on input costs at the time of signing deals, the company has inked multi-year contracts that may not have included hedging memory prices for three to five years, which is likely to exert significant pressure on margins, the analyst stated.



Execution risk remains high for all AI clouds, Luria wrote. It may be more of an issue given the steepness of the ramp for CoreWeave and “a history of previous missteps,&#34; he added.



All of these concerns justify the stock trading at a discount to Nebius Group (NASDAQ:NBIS), he added.



<h2>Price Action</h2>



Shares of CoreWeave had declined by 6.27% to $100.57 at the time of publication on Monday.



<div>




Read Also:

Analyst Warns CoreWeave Stock Could Stay 'Lumpy, Volatile'




</div>


Image: Shutterstock

📢Giveaway Event
Data center stocks CoreWeave and Iren have already reported earnings, with NBIS set to take center stage this Wednesday. The sector has been strong since the beginning of the year! Which side are you on in this sector?1️⃣ The Trading Proponent – ​​How did you trade before and after the earnings reports? Share your actual holdings and entry/exit points, along with your judgment, for a higher chance of winning!2️⃣ The In-Depth Proponent – ​​Is Neocloud truly the sharpest shovel for AI? Write your independent analysis of CRWV/IREN/NBIS or the entire sector. Your opinions will earn you a chance!Reward Rules:🥇 Excellent Content Award: Up to HKD 10 stock voucher per person☀️ General Award: 88 Task Coins per personWinning entries will be selected through comprehensive evaluation. Entries must be well-reasoned, supported by evidence, and demonstrate independent judgment. Purely AI-generated content will not be accepted. No limit on the number of winners!The event ends at 24:00 on May 14th. Prizes will be distributed within 15 business days after the event ends. Changqiao reserves the right to interpret these terms and conditions.

📢Giveaway Event Data center stocks CoreWeave and Iren have already reported earnings, with NBIS set to take center stage this Wednesday. The sector has been strong since the beginning of the year! Which side are you on in this sector?1️⃣ The Trading Proponent – ​​How did you trade before and after the earnings reports? Share your actual holdings and entry/exit points, along with your judgment, for a higher chance of winning!2️⃣ The In-Depth Proponent – ​​Is Neocloud truly the sharpest shovel for AI? Write your independent analysis of CRWV/IREN/NBIS or the entire sector. Your opinions will earn you a chance!Reward Rules:🥇 Excellent Content Award: Up to HKD 10 stock voucher per person☀️ General Award: 88 Task Coins per personWinning entries will be selected through comprehensive evaluation. Entries must be well-reasoned, supported by evidence, and demonstrate independent judgment. Purely AI-generated content will not be accepted. No limit on the number of winners!The event ends at 24:00 on May 14th. Prizes will be distributed within 15 business days after the event ends. Changqiao reserves the right to interpret these terms and conditions.

Data center earnings season: Who is the true leader?

CRWV

NVDL

CLOU

MSFU

NVDU

DA Davidson analyst Gil Luria has cut CoreWeave's price target from $175 to $100, citing concerns over profitability and high debt dependence amid rising input costs. CoreWeave's shares fell 6.27% to $100.57. Luria noted the company's low 1% EBIT margin and execution risks, despite strong demand in the AI cloud sector and investments from major players like Nvidia and Microsoft.

benzinga_article

Coreweave

GraniteShares 2x Long NVDA Daily ETF

Global X Cloud Computing ETF

Direxion Daily MSFT Bull 2X Shares

Direxion Daily NVDA Bull 2X Shares

NVIDIA

Microsoft

OpenAI

Meta Platforms

Nebius

NVIDIA Corporation

This CoreWeave Analyst Cuts Price Target On Margin Pressure From Rising Input Costs