HSBC Keeps Underweight on CoreWeave (CRWV), Sees 37% Further Downside to $39 Target

HSBC maintained an Underweight rating and $39 price target on CoreWeave (CRWV), implying roughly 37.2% downside from Tuesday's $62.13 close. The stock has fallen about 55.6% from its 52-week high of $139.93. The analysts cited structural disadvantages versus hyperscalers, estimating CoreWeave will generate about $12 million in annual revenue per megawatt of capacity in 2027, compared with $17 million to $18 million for hyperscalers. Neocloud revenue relies mainly on renting homogeneous bare-metal GPU compute to large customers, while hyperscalers rent capacity through more profitable short-term contracts and run differentiated general cloud businesses. HSBC flagged risks to recent lucrative short-term deals, including a slight slowdown in LLM provider growth that could weaken spot compute demand, and rising yields that may prevent neoclouds from prebuilding capacity before demand is secured. Its 2028-2030 non-GAAP EPS estimates sit 50% to 70% below consensus, and it expects long-term non-GAAP operating margins of 15% to 16%, below management's roughly 25% target. Goldman Sachs upgraded the stock to Buy from Neutral but cut its target to $106 from $139. Evercore ISI kept an Outperform rating and $150 target.