CoreWeave Inc. (NASDAQ:CRWV) stock edged lower in Thursday’s premarket session after tumbling 13.92% in the previous trading day.
The weakness followed reports that Meta Platforms Inc. (NASDAQ:META) is exploring an expansion into AI computing services, raising concerns that the tech giant could become a new competitor in the fast-growing neocloud market.
The competitive concerns extended across the sector. Nebius Group N.V. (NASDAQ:NBIS) stock fell 17.01% in Wednesday’s session as investors reassessed the outlook for neocloud providers.
While the Meta report sparked concerns about future competition, not all Wall Street analysts believe the sell-off is justified. Some argue that demand for AI computing remains strong and that CoreWeave’s competitive position has not materially changed.
Rosenblatt Sees Buying Opportunity
Rosenblatt analyst John McPeake defended CoreWeave after the Meta report. He said the firm’s checks show no change in demand for GPU computing capacity from large cloud companies, with shortages still common across the industry.
McPeake also said Meta likely does not have the right to resell any capacity it has leased from CoreWeave through 2032 to third parties. He said CoreWeave’s weakness creates a buying opportunity and reiterated a Buy rating with a $250 price forecast.
Evercore ISI analyst Mark Mahaney told CNBC that Meta could generate $10 billion to $20 billion in incremental annual revenue by selling excess AI computing capacity.
He said Meta is unlikely to compete directly with Amazon.com Inc.’s (NASDAQ:AMZN) AWS or Microsoft Corp.’s (NASDAQ:MSFT) Azure. Instead, he believes the company is targeting the emerging neocloud market.
If successful, Meta could leverage its scale to compete with specialized AI infrastructure providers while generating a lucrative new revenue stream from assets it has already built.
Weak Technical Picture
CoreWeave shares traded at $85.45, well below all major moving averages. The stock is down 43.5% over the past 12 months and trades 17% below its 20-day simple moving average, 21.7% below its 50-day SMA, 13.7% below its 100-day SMA and 14.7% below its 200-day SMA.
The 20-day SMA remains below the 50-day SMA, a bearish signal that points to persistent selling pressure. Although the stock formed a golden cross in May, with the 50-day SMA moving above the 200-day SMA, shares have since fallen below both averages, limiting the bullish signal’s impact.
Momentum indicators also remain weak. The MACD is below its signal line and the histogram is negative, suggesting upside momentum has faded. On the upside, $88.50 is the first key resistance level. Support sits near $70.50, close to the lower end of the stock’s 52-week range.
CoreWeave Price Action
CRWV Stock Price Activity: CoreWeave shares were down 0.28% at $85.45 during premarket trading on Thursday, according to Benzinga Pro data.
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