TLDR
- BofA Securities reiterated a Buy rating and $140 price target on CoreWeave (CRWV)
- The bank raised its fiscal 2026 capex estimate to $34 billion, up from $29 billion
- CRWV stock trades at $73.21, down 52% from its 52-week high of $153.20
- BofA projects Q2 operating margin of 2.4%, with improvement to 14.6% by Q4
- BofA does not view the compute market as structurally competitive, citing demand far exceeding supply
CoreWeave stock climbed 2.3% in pre-market trading on Sunday after BofA Securities reiterated its Buy rating on the AI cloud infrastructure company.
CoreWeave, Inc. Class A Common Stock, CRWV
The bank maintained its $140 price target, even as the stock continues to trade well below that level. CRWV is currently priced at $73.21, down 52% from its 52-week high of $153.20.
The stock had dropped 12% over the prior week, weighed down by competitive concerns from Meta and SpaceX reportedly moving into cloud services.
BofA also raised its fiscal 2026 capital expenditure estimate for CoreWeave to $34 billion, up from a prior forecast of $29 billion. The bank cited changing market dynamics in hardware component buildout and AI infrastructure demand.
On margins, BofA projects CoreWeave will post an operating margin of 2.4% in Q2 fiscal 2026. That sits slightly below the Street consensus of 2.8%.
The picture improves through the year, though. BofA expects margins to rise sequentially, reaching 14.6% by Q4, compared to just 1.0% in Q1. That margin recovery story appears to be giving investors some confidence.
Analysts at BofA forecast a loss of $3.81 per share for fiscal 2026. The company is not expected to be profitable this year.
Competition Concerns Addressed
BofA directly addressed the competitive pressure narrative. The firm does not view the compute market as structurally competitive, arguing that demand for AI compute far exceeds supply.
According to BofA, access to capacity — not provider selection — is the primary gating factor in the market right now. That framing pushes back against fears that Meta or SpaceX could meaningfully cut into CoreWeave’s position.
Other firms have echoed this view. Wolfe Research reiterated an Outperform rating with a $150 price target. Rosenblatt maintained a Buy rating with a $250 price target. Evercore ISI also reiterated Outperform at $150.
The elevated call options activity, particularly in August expiry contracts, suggests traders are positioning for a near-term rebound in the stock.
Broader Market Backdrop
The wider market offered a supportive setting on the day. The Nasdaq gained 0.6%, the S&P 500 rose 0.3%, and the Dow added 0.2%. That risk-on tone tends to benefit high-beta names like CoreWeave.
The raised capex estimate from BofA signals that institutional analysts still see strong long-term demand for CoreWeave’s GPU cloud platform.
As incremental active power drives revenue recognition, BofA expects the company to show strong operating leverage going forward.
The stock was trading at $76.73, up 4.81%, later in the session.
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