CoreWeave has pulled back due to concerns over its massive debt load, and investors should take advantage of the discount, according to UBS. The investment bank initiated coverage of CoreWeave with a buy rating and set a $120 price target, implying a 38% upside from Tuesday’s close. Analyst Karl Keirstead noted that despite strong AI compute demand signals and expectations for higher revenue per GW, market sentiment remains cautious. He acknowledged leverage and credit risks but concluded that these concerns are peaking. Shares have dropped about 18% over the past three months amid worries about the company’s substantial borrowing to fuel growth. The sell-off intensified after CoreWeave announced plans to sell $3 billion of convertible debt and issue additional shares, raising equity‑dilution concerns. However, UBS remains bullish, citing continued AI compute demand, favorable GPU pricing trends that could lift revenue per GW from roughly $11 billion today to $15 billion plus over time, and CoreWeave’s strong reputation for reliability and performance. The analyst also pointed out that consensus among Street coverage is supportive, with 28 of 41 analysts rating the stock a buy or strong buy, according to LSEG data.
