CoreWeave’s Debt Fears Are ‘Peaking,’ Top Analyst Says — Sees 38% Upside Amid ‘Durability’ of AI Compute Demand

CoreWeave, Inc.’s (NASDAQ:CRWV) stock decline, driven by concerns over its heavy debt burden, presents an opportunity for investors to buy at a discounted price, said UBS. UBS initiated coverage of CoreWeave with a buy rating, setting a $120 price target on the shares, indicating over 38% upside from its Tuesday closing price. Analyst Karl Keirstead believes that the market’s cautious sentiment due to CoreWeave’s debt is “peaking,” CNBC reported. Keirstead predicts that CoreWeave will bounce back as it continues to grow in response to the consistent demand for AI compute. He also suggests that the market might be “underappreciating” the “strength and durability” of AI compute demand, not just from frontier labs but also from enterprises. Furthermore, Keirstead emphasized CoreWeave’s reputation for reliability and performance, which distinguishes it from its competitors. He expects the company’s revenue per GW to increase from approximately $11 billion today to over $15 billion in the future, driven by graphics processing unit pricing trends. Read Also: Apple Takes Aim at Nvidia’s AI Economics: New Macs Have ‘No Cost per Token,’ Hardware Chief Says CoreWeave Expands Amid Heavy Debt Last week, CoreWeave announced plans to raise $3 billion through convertible debt, with an option for another $500 million, while opening the door to selling up to 35 million shares. The financing comes as research flagged CoreWeave as a highly leveraged player in the AI supply chain. CoreWeave had $35.6 billion in debt as of June 30 and plans to spend $35 billion-$39 billion on capital expenditures this year. Its growth depends heavily on continued access to financing to fund AI infrastructure, leaving the company exposed if borrowing costs rise or AI demand slows. Cathie Wood’s ARK Investment Management purchased 239,083 CoreWeave shares worth about $19.1 million, adding 191,868 shares to the ARK Innovation ETF (BATS:ARKK) and 47,215 shares to the ARK Next Generation Internet ETF (BATS:ARKW). The purchases came after CoreWeave’s latest funding push. CoreWeave is benefiting from strong AI infrastructure demand, adding more than $25 billion in customer commitments in early Q3 2026 and increasing contracted power capacity to 4.2 GW. Short-term computing contracts are generating roughly $40 million in annualized revenue per megawatt, highlighting tight AI-compute supply. Benzinga Edge Stock Rankings shows that CRWV had a stronger price trend over the short term and a momentum rating of 9.81. Benzinga’s screener allows you to compare CRWV’s performance with its peers. Price Action: Over the past year, CoreWeave stock declined 34.88%, as per Benzinga Pro. On Tuesday, it closed 1.56% higher at $86.76. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Read Also: Broadcom Faces China Data Center Threat as Beijing Finds Its Switches in Up to 90% of State-Owned Firms: Report Image Via Shutterstock