CoreWeave stock gets Evercore ISI backing on Poolside GPU deal

CoreWeave, valued at $69.5 billion, has significantly expanded its AI infrastructure capacity through a new partnership with Poolside, committing to provide over 40,000 Nvidia GB300 GPUs and anchoring a 250-megawatt AI data center in West Texas. This deal is estimated by Evercore ISI to add $5 billion to CoreWeave's backlog, potentially exceeding $55 billion, underscoring robust future revenue visibility and supporting analyst forecasts for 174% revenue growth this fiscal year. Evercore ISI reiterated its Outperform rating, citing backlog upside and customer diversification, while CoreWeave also launched its Serverless RL platform for AI agent training and confirmed it will not increase its acquisition offer for Core Scientific.

Analysis

CoreWeave (CRWV) has significantly bolstered its AI infrastructure capacity and revenue visibility via a new partnership with Poolside, involving over 40,000 Nvidia GB300 NVL72 GPUs. Evercore ISI estimates this deal adds $5 billion to CoreWeave’s backlog, potentially exceeding $55 billion, underpinning analyst forecasts for 174% revenue growth this fiscal year from $3.5 billion TTM revenue. CoreWeave will also anchor a 250-megawatt AI Data Center in West Texas, with an option for 500 MW expansion, highlighting long-term strategic infrastructure.

Evercore ISI reiterated its Outperform rating and $175 price target on CRWV, citing backlog upside and customer diversification beyond hyperscalers. Despite a 235% YTD return, InvestingPro data indicates the stock is trading above its Fair Value, while broader analyst targets range from $32 to $234. The estimated $500 million annual lease expenses for the initial 250 MW data center capacity represent a substantial new operational cost.

CoreWeave further expanded its AI offerings by launching Serverless RL, a platform expected to improve training efficiency by 1.4 times and reduce costs by 40%, marking its first collaboration with OpenPipe. This innovation reinforces the company's commitment to its durable GPU cloud business model, characterized by multi-year take-or-pay contracts. Separately, the CEO confirmed no revision to the acquisition offer for Core Scientific, maintaining a firm valuation stance.

Key Decisions for Investors

• Investors should evaluate CoreWeave's substantial backlog growth and projected 174% revenue increase against its current $69.5 billion valuation and InvestingPro's indication of trading above fair value.
• Closely monitor the impact of the estimated $500 million annual data center lease expenses on CoreWeave's profitability and cash flow.
• Consider the long-term implications of CoreWeave's durable GPU cloud business model, characterized by multi-year take-or-pay contracts and its continued AI innovation.
• Acknowledge the firm stance on its Core Scientific acquisition offer, which may limit further upside for CORZ investors.