CoreWeave shares jumped about 10% on Tuesday after Cantor Fitzgerald highlighted data in a bond-offering memorandum suggesting the cloud-computing company's backlog could reach $131 billion by June 30, well above the $104.4 billion consensus estimate. Analyst Brett Knoblauch maintained an Overweight rating and $167 price target, citing overlooked metrics in the filing.
CoreWeave Inc. shares surged about 10% on Tuesday after Cantor Fitzgerald said a bond-offering memorandum points to a second-quarter backlog that could far exceed Wall Street estimates.
"The equity investors have largely ignored" several internal metrics disclosed in the filing that provide insight into contract signings during the quarter, Cantor analyst Brett Knoblauch said in a note. He maintained an Overweight rating and $167 price target on the stock.
The cloud-computing company disclosed run-rate EBITDA of $18.758 billion in the memorandum, up from $16.098 billion reported in an April filing. Using that figure, Knoblauch estimated CoreWeave's backlog reached about $125 billion by early June. If contract additions continue at a similar pace, the backlog could exceed $131 billion by June 30, surpassing the $104.4 billion consensus and the first-quarter figure of $99.4 billion.
The stock's gain was also supported by CoreWeave's scheduled addition to the Nasdaq 100 Index on June 22, which will trigger buying from passive funds tracking the benchmark. Macquarie upgraded the stock to Outperform from Neutral last week, raising its price target to $125 from $90, citing partnerships with Meta Platforms Inc. and OpenAI.
The bond memorandum also disclosed that gross debt could reach $68.5 billion and net debt $58.3 billion as CoreWeave funds its expansion. The company recently priced $1.25 billion in senior notes at 9.625% and 2 billion euros in notes at 8.5%, both maturing in 2032. Knoblauch argued the market is "woefully undervaluing" neocloud providers despite the leverage.
The backlog beat potential gives CoreWeave a near-term catalyst heading into its next earnings report. Investors will watch whether the company can convert its growing contract backlog into sustainable free cash flow and reduce its reliance on debt financing.
This article is for informational purposes only and does not constitute investment advice.
