Key Takeaways

CoreWeave ( CRWV ) shares surged Tuesday as several analysts launched coverage of the artificial intelligence play with price targets suggesting they see gains for the stock.

Shares of the cloud computing company backed by Nvidia ( NVDA ) were up over 8% in Tuesday afternoon trading, near their initial public offering price of $40 , and down from their April 2 record close at $61.36.

Jefferies analysts on Tuesday initiated coverage with a "buy" rating and a price target of $51, as they said CoreWeave could be "well positioned to capture" growing demand for AI compute. Analysts from Bank of America, Mizuho, and JPMorgan also issued "buy" ratings, with price targets of $42, $46, and $43, respectively.

However, JPMorgan analysts cautioned they expect the stock could "provide a wild, lumpy, volatile ride, requiring a risk tolerance that may not exist for most investors."

Several analysts noted risks tied to CoreWeave's AI-centric business, and the fact that CoreWeave's revenue is highly concentrated, with Microsoft ( MSFT ) accounting for more than half of its revenue last year.

Analysts from Citi gave CoreWeave a "neutral" rating and $43 price target, calling it a "high risk" investment where they "would like to see a few quarters play out before getting off the sidelines." Morgan Stanley and Deutsche Bank analysts were also "neutral" on the stock, with price targets of $46 and $45, respectively.

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