CRWV Stock Dips Overnight: Cathie Wood's ARK Investment Loads Up On Neocloud Despite Recent Market Selloff
-
ARK Innovation ETF bought 102,280 CRWV shares on Monday for $6.3 million and 30,218 shares for $1.8 million through the ARK Next Generation Technology ETF.
-
The purchase comes as Wall Street and Main Street remain concerned about the company’s ballooning debt levels.
-
MoffettNathanson and BNP Paribas lowered the price target on CoreWeave, while Goldman Sachs upgraded the company.
CoreWeave Inc. (CRWV) shares fell nearly 2% in overnight trading late Monday, putting it on track for a third week of declines amid a selloff in software names.
However, Cathie Wood’s ARK Investment purchased 132,498 shares of the company on Monday despite the selloff.
ARK Investment’s CRWV Purchase
The asset manager’s ARK Innovation ETF (ARKK) bought 102,280 CRWV shares on Monday for $6.3 million, according to its website. The firm also bought 30,218 shares of CRWV for $1.8 million through the ARK Next Generation Technology ETF (ARKW).
The purchase comes as Wall Street and Main Street remain concerned about the company’s ballooning debt levels. CoreWeave reported $35.6 billion in total debt as of June 30, while its second-quarter net interest expense rose to $640 million from $267 million a year earlier.
Research and advisory firm Gartner recently said in a report that artificial intelligence infrastructure investments are in danger as concerns over bloated AI capex mount. The firm said that as the commercial duopoly for primary frontier models consolidates around Anthropic and OpenAI, the cash flows to meet that massive computing asset base from neoclouds are not scaling proportionally with upfront costs.
Wall Street Split On CRWV Stock
Meanwhile, major Wall Street analysts are also taking opposing stances on CoreWeave. MoffettNathanson and BNP Paribas lowered their price targets on CoreWeave, while Goldman Sachs took a more positive outlook.
MoffettNathanson slashed CRWV stock’s target to $89 from $107 and kept a ‘Neutral’ rating on the shares, citing its “staggering financial obligations.”
BNP Paribas also cut its price target on CoreWeave to $117 from $169 and maintained an ‘Outperform’ rating, according to The Fly. The firm said that it sees a continued deterioration in investor confidence amid its debt obligations. While higher financing costs could contain the company’s ability to fund future growth, the shares are “seemingly discounting some liquidity concerns,” the analyst reportedly said in a research note.
However, Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral’ and set a price target of $106, implying upside of more than 73% from its last close. The firm said ongoing volatility in the credit market raises questions about whether CoreWeave can finance its next phase of growth, and at what pace.
However, Goldman also said the ongoing debate over demand for frontier vs. off-frontier intelligence, and CoreWeave’s annual recurring revenue per megawatt and unlevered internal rate of return, are “biased to the upside” over the next 24 months because of tight supply. The analyst also said that CoreWeave is differentiated from other neoclouds.
Last week, Dan Ives, Yorkville Ives partner and senior managing director analyst, said in an interview that the recent sell-off was an overreaction, as the broader AI demand story remains intact.
“I’m not saying there’s not some issues in terms as rates go higher. But given the demand, given backlog, I think this is ultimately a false narrative,” he said, while also highlighting that the sharp drop has created an opportunity for investors.
CRWV Stock: Retail Stance
On Stocktwits, retail sentiment for CRWV stock was ‘extremely bullish,’ even as message volumes surged 938% over 24 hours, according to platform data.
One user said, “$CRWV $NBIS are moving in tandem.. absolutely nothing to see here…” The user added, “When the wrestling match ends, these are going straight up, meanwhile, you or I have zero say in it.”
Another user said, “$CRWV buy low sell high.”
CRWV stock is down more than 14% year-to-date.
For updates and corrections, email newsroom[at]stocktwits[dot]com
Aashika Suresh has no position in any of the stocks mentioned in this article. StockTwits’ news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits.
Related: