UBS starts CoreWeave at Buy with a $120 target

UBS initiated coverage of AI infrastructure provider CoreWeave with a Buy rating and a $120 price target, implying about 40% upside. Analyst Karl Keirstead called the recommendation a non-consensus positive view, noting that cautious sentiment across Wall Street has left the stock trading at 3 times projected 2027 revenue.

Keirstead stated that major worries surrounding the company, mainly leverage and credit risk, are reaching their peak. He noted that a positive stance on CoreWeave is effectively a bet that investors will rotate back into AI trades, supported by strong demand from enterprise clients as well as frontier AI labs.

GPU pricing trends could raise CoreWeave's revenue per gigawatt from about $11 billion to more than $15 billion over time. While the analyst highlighted risks such as high leverage amid rising interest rates, uncertain long-term sector profitability, and customer concentration where three clients account for 72% of revenue, he argued that these factors are already priced in.

CoreWeave shares have gained 19% this year. The stock trades at 3 times revenue and 5.1 times adjusted EBITDA, a discount compared to peers like DigitalOcean and Nebius. Keirstead described the valuation as attractive for a business with 112% revenue growth. His $120 target is based on 3.8 times expected 2028 sales.