CoreWeave Stock Drops On Wall Street Skepticism Following Q3 Results – But Morgan Stanley Sees Opportunity

• CoreWeave cut its full-year revenue guidance to the range of $5.05 billion to $5.15 billion, down from $5.15 billion to $5.35 billion.
• JPMorgan cited supply chain delays from a third-party data center provider as the reason for the guidance cut and downgraded the stock to ‘Neutral.’
• Morgan Stanley raised its price target on the stock to $99, citing strong GPU demand and CoreWeave’s rapid scaling, while noting execution risk due to supply constraints.

CoreWeave (CRWV) fell on Tuesday after Wall Street became cautious following the company's lowering of its full-year guidance, although Morgan Stanley countered with a higher price target.

CRWV’s stock fell more than 12% on Tuesday and was the top trending ticker on Stocktwits in morning trade. Despite the share price dip, retail sentiment on Stocktwits flipped to ‘extremely bullish’ from ‘bearish’ territory over the past day, as chatter rose to ‘extremely high’ from ‘normal’ levels over the past day.

JPMorgan Downgrades CoreWeave

JPMorgan downgraded the stock to ‘Neutral’ from ‘Overweight’ with a price target of $110, citing mounting supply chain pressures that offset the company’s "very robust" bookings performance. The firm stated that the long-term opportunity remains intact, but noted an increased difficulty in forecasting CoreWeave’s near-term results.

Morgan Stanley Sees Opportunity Amid Supply Constraints

Morgan Stanley analyst Keith Weiss raised the firm’s price target on CoreWeave to $99 from $91 and maintained an ‘Equal Weight’ rating. He noted that strong demand for GPU capacity against limited supply creates opportunities, enabling CoreWeave’s "unprecedented pace of scaling as the market’s most effective GPU cluster builder." 

Weiss added that supply constraints, while short-term, highlight execution risk for the company.

Here’s how other analysts reacted: 

- Jefferies lowered its price target to $155 from $180 while maintaining a ‘Buy’ rating. 

- Melius Research cut its price target to $140 from $165 with a ‘Buy’ rating. 

- Bank of America trimmed its price target to $140 from $168 and kept a ‘Neutral’ rating.

Guidance Cut Reflects Supply Delays

The company reported a loss of $0.22 per share, lower than the expected $0.36 by Wall Street, according to Koyfin data. Revenue came in at $1.37 billion, beating the consensus forecast of $1.28 billion. 

CoreWeave now expects full-year revenue to be between $5.05 billion and $5.15 billion, down from its previous guidance of $5.15 billion to $5.35 billion. Adjusted operating income is projected to be between $690 million and $720 million, which is below the prior range of $800 million to $830 million. The company attributed the reduction to delays in power shell delivery from its third-party data center provider, which will also impact fourth-quarter results.

Read also: NBIS Stock Rises After $3 Billion Meta AI Infrastructure Deal Despite Shaky Q3 Results

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