CoreWeave Offers So Much at $85

CoreWeave (CRWV) reported a remarkable 112% revenue growth in the second quarter, boasting a substantial $104 billion backlog of orders. The stock is trading 38% lower than its May high of $85. Despite its strong performance, CoreWeave faces a bear case due to $72 billion in total liabilities and negative free cash flow. Analysts have set a consensus price target of $144.46, suggesting a 70% upside potential.

Operating margins are expected to expand toward the low teens by the fourth quarter. CoreWeave provides a specialized GPU-native cloud infrastructure tailored for high-density AI training and inference, offering lower latency and better price-to-performance compared to traditional hyperscalers like AWS, Azure, and Google Cloud. The company generated $2.58 billion in revenue during the quarter, with a $104 billion revenue backlog, positioning it favorably for growth.

Management announced a 25% price increase across SKUs in July, with new highs for Blackwell and Vera Rubin SKUs. Adjusted EBITDA reached $1.51 billion at a 59% margin, and operating cash flow turned positive at $679 million. However, the bear case centers on capital intensity, with Q2 free cash flow at -$5.74 billion and full-year 2026 capex guidance elevated to $35 to $39 billion.

Interest expenses reached $640 million in the quarter, with estimates ranging from $860 to $940 million in Q3. Total liabilities stand at $72.05 billion, dwarfing equity of $5.02 billion. Analysts have adjusted their EPS estimates, with seven downward revisions compared to one upward revision for fiscal 2026. Despite these challenges, the stock trades at $84.89, with a consensus target of $144.46, indicating approximately 70% upside potential.