How much more can CoreWeave's stock rally? A lot, says this new bull.

By Emily Bary

Customer concentration has been an issue for CoreWeave, but Evercore sees room for improvement there - and a new deal backs that up

CoreWeave's stock has charged 200% higher since the company went public in March, but an Evercore analyst predicts more upside.

CoreWeave Inc.'s stock remains a controversial one on Wall Street, in light of its roughly 200% rally off its initial-public-offering price, reliance on leverage to drive growth and heavy customer concentration.

But even as he acknowledged that there are "a wide range of outcomes" for the "volatile" stock, Evercore ISI analyst Amit Daryanani said there's reason for optimism. He initiated coverage of CoreWeave shares (CRWV) with an outperform rating and $175 target price on Tuesday. That target implied the potential for about 40% upside from Monday's close, though less upside from current intraday levels, given a strong Tuesday rally on the heels of a new deal.

There are concerns about CoreWeave's customer concentration, as the company is tied closely to OpenAI. Daryanani said that nearly 80% of CoreWeave's revenue last quarter was linked to Microsoft Corp. (MSFT) or OpenAI, and "a significant portion" of Microsoft's AI business "associated with providing compute infrastructure for OpenAI."

See also: The AI trade increasingly hinges on OpenAI - and that's a big risk for the entire market

But he also said there's "a line of sight to diversification away" from Microsoft, which alone made up more than 70% of revenue last quarter, even if the company's remaining performance obligations suggest opportunities that are "still OpenAI-centric." He also noted the potential that Alphabet Inc.'s (GOOGL) (GOOG) Google could emerge as a new customer win.

The initiation from Evercore came before CoreWeave disclosed in a filing Tuesday morning that it had reached an agreement to supply Meta Platforms Inc. (META) with additional computing power in a deal that could be worth as much as $14.2 billion. Shares of CoreWeave are up 13% in midday action Tuesday.

In a subsequent report, Daryanani said the deal seems like a "positive that provides further diversification away from the OpenAI/[Microsoft] ecosystem in addition to multiple years of revenue visibility."

Overall, he's upbeat on the company's ability to capitalize on robust AI spending. "We think demand for AI infrastructure far outpaces supply and that will place an upside bias to revenues for [CoreWeave] and simultaneously a lower interest-rate environment will diminish the cost to build/operate the infrastructure," he wrote in his original note to clients.

Read: Will CoreWeave bears get burned? New Nvidia deals spark fresh optimism for the stock.

Daryanani praised the company's technology and its platform "designed and built for AI workloads from the ground up," which offers efficiency advantages relative to traditional hyperscale cloud providers. He said CoreWeave is in a unique spot to provide infrastructure-as-a-service offerings to "not just AI-centric customers, but also ... enterprises looking to build/run/deploy AI applications."

In general, Daryanani pointed out CoreWeave's accelerating top-line growth and "high-quality" remaining performance obligations. Those two factors could lead to "sustained" improvement in margins and earnings per share over the long run, he said. Capital expenditures, though, are set to soar, with the potential to exceed $20 billion this calendar year versus less than $9 billion last year.

That means the potential for "elevated" depreciation and amortization, which could amount to more than 50% of revenue this calendar year compared with 45% last year. One risk is that CoreWeave assumes a six-year useful life for graphics processing units, even though "the annual new product cadence from Nvidia could increase obsolescence risk."

The company's financing and debt maneuvers have raised some eyebrows, though Daryanani said that the model of GPU-based financing is "innovative." At the same time, CoreWeave is racking up debt that could balloon to $26 billion by next calendar year, versus about $8 billion at the conclusion of 2024.

Don't miss: What CoreWeave's new $6.3 billion contract with Nvidia says about the AI trade

-Emily Bary

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09-30-25 1219ET