The artificial intelligence trade tanked this week as Anthropic reported decelerating revenue growth amid accelerating AI capex, adding fuel to the fire of a sell-off in the AI-dedicated server companies known as neoclouds – especially CoreWeave . Analysts are perking up about CoreWeave, even though investors are dumping shares and interest rates are rising in the economy. The stock is down about 11% as of 12:38 p.m. ET, while the 2032 bond yield is flat. CRWV 1D mountain CRWV 1 day Analyst Brent Thill at Jefferies described the sell-off as “overdone” in a note to investors. He reiterated his price target of $150, suggesting upside of 115% from Thursday’s close. Thill said that CoreWeave’s pricing power is increasing even as its debt service costs may expand. “Higher rates on future deals are a fair risk… With rising yields on CRWV’s unsecured debt and higher rates broadly, the market is increasingly worried about CRWV’s future cost of capital. It’s a valid concern that new debt deals could price at higher rates. …but pricing for capacity is rising much faster in the near term,” Thill wrote in his analysis. Falling expectations for an interest rate increase at the Federal Reserve’s next meeting later this month may be giving CoreWeave bonds some room to breathe. The odds of a quarter-point rate hike have dropped to just 17% in futures markets , as Fed Chairman Kevin Warsh declined to give a rate signal in his latest public appearance. In a Friday note to clients, JPMorgan also asserted that fears were “overdone” while touting CoreWeave’s fundamentals. The firm rates the stock overweight. “Datacenter demand is robust and has improved in recent months, rather than moderated,” Samik Chatterjee at JPMorgan wrote. The analyst also noted that CoreWeave’s “capacity is pre-sold under long-term take-or-pay contracts rather than building for estimated demand.” However, other analysts have expressed concerns about assuming that take-or-pay legal structures are iron-clad and about equating backlogs with revenue. Attorneys who specialize in the field are anticipating disputes over the contractual framework in the future. Other neoclouds in addition to CoreWeave are also down, with Nebius falling 9% and IREN falling 8% in midday trading Friday. NBIS 1D mountain NBIS 1 day Analysts at Cantor Fitzgerald said that “false narratives [are running] amok” on CoreWeave in a Thursday note to clients amid the rise in its bond yields over 15%. “We believe this is one of the most attractive times to add to or enter into a CRWV position, as we think the market is getting it wrong,” Brett Knoblauch at Cantor wrote. “We would advise investors to take a step back and look at how CRWV’s business has consistently improved.”
