Bernstein has reaffirmed its 'Underperform' rating on CoreWeave, the cloud computing company specialising in AI workloads, setting a price target of $67 per share. The call comes as markets continue to reassess the valuations of AI-linked technology firms amid shifting investor sentiment towards the sector.
Analysts at Bernstein pointed to elevated valuation multiples and intensifying competition from larger cloud providers such as Amazon Web Services and Microsoft Azure as key reasons for the cautious stance. CoreWeave, which has carved out a niche in GPU-as-a-service for AI training, faces margin pressure as hyperscalers ramp up their own offerings.
The stock has come under pressure in early trading, though the broader market — including the FTSE 100 — showed little immediate reaction, as CoreWeave is listed on the Nasdaq. For UK investors with exposure to global technology funds or pension portfolios holding US equities, the note serves as a reminder of the volatility inherent in the AI infrastructure space.
CoreWeave’s share price has been volatile since its public listing, reflecting both the promise of AI-driven demand and the risks of a capital-intensive business model. Bernstein’s $67 target implies a significant downside from recent trading levels, underscoring the divergence between bullish growth narratives and more conservative analyst assessments.
The report adds to a growing chorus of caution among sell-side analysts covering the AI cloud sector, with several firms warning that the rapid build-out of data centre capacity could lead to oversupply. Bernstein did not provide a timeline for potential catalysts that might change their outlook.