Overview

• CoreWeave shares fell 9.6% on Thursday and nearly 4% on Friday following Needham’s decision to downgrade the stock from Buy to Hold due to what it saw as a lofty valuation.
• The downgrade came days after CoreWeave announced the $9 billion all-stock acquisition of Core Scientific on July 7, aiming to integrate its data center assets.
• The acquisition is projected to add 1.3 gigawatts of gross power capacity plus 1 gigawatt for future expansion and deliver $500 million in annual run-rate cost savings by 2027.
• Upcoming lockup expirations will release 290 million shares starting in August, substantially increasing the tradable float from its current level below 13%.
• Despite the recent pullback, CoreWeave remains up 216% since its April IPO on strong Q1 revenue growth of 420% and strategic partnerships with Nvidia and OpenAI, though the firm does not expect profitability until late 2026.