CoreWeave has dropped 40% in price over the past month. An analyst has identified an entry point for risk-tolerant investors.

CoreWeave, a provider of cloud infrastructure for AI, will release its third-quarter earnings report after the market closes on November 10. The company’s stock has fallen 40% over the past month amid investor concerns about its debt burden. A Morningstar analyst believes the decline has created an attractive opportunity for investors willing to tolerate high risk and uncertainty.

CoreWeave shares are currently “moderately undervalued,” writes Morningstar analyst Luke Young. He estimates the fair value of the stock at $108 per share, while yesterday they were trading for less than $54 on the stock exchange.

"Following the recent sell-off amid concerns about funding, CoreWeave shares appear attractively valued for investors willing to take on a high level of risk," Yang wrote.

At the same time, Yang reaffirmed the “Very High Uncertainty” rating for the stock—the second-highest level on the Morningstar scale, just below “Extreme,” which reflects the degree of uncertainty analysts have regarding the stock’s fair value.

“The future of non-cloud providers depends on long-term demand for AI infrastructure, which remains difficult to predict. Furthermore, although 98% of CoreWeave’s contracts as of 2025 are take-or-pay agreements, there is no guarantee that such terms will remain in place in the future,” Yang noted.

The key question ahead of the earnings report is whether recent reports that CoreWeave’s corporate bond yields have exceeded 15% have affected the company’s ability to raise debt and the cost of borrowing. Yang believes this impact will be minimal.

As of 2025, CoreWeave’s debt exceeded $21 billion, and its net debt-to-adjusted EBITDA ratio stood at 9x. Morningstar expects the company’s total debt burden to exceed $100 billion by 2030. However, thanks to growing profits from cloud-based AI services, the net debt-to-EBITDA ratio is expected to decline from 9x to approximately 3x.

The analyst also plans to monitor the timely commissioning of new data centers and the initial pace of cluster expansion using Nvidia Vera Rubin chips. The company’s forecast for capital expenditures for all of 2026 is $35–39 billion. This implies the addition of about 1 gigawatt of total capacity over the course of the year. CoreWeave has already brought 650 megawatts online in the first half of the year, so the workload for the second half is lighter, but this is still worth keeping an eye on, writes the Morningstar analyst.

Another factor he plans to monitor is the diversification of CoreWeave’s customer base across various industries, which should reduce the company’s reliance on a few large clients.

With a projected average annual revenue growth rate of 70% over the next five years, the Morningstar analyst does not expect GAAP earnings per share to turn positive within the next three years, nor does he expect free cash flow to materialize before 2033. According to Jan’s estimates, CoreWeave’s adjusted operating margin could reach 20–25%, which is comparable to other cloud providers for AI. Furthermore, the analyst believes the company lacks sustainable competitive advantages: the cloud AI infrastructure market is extremely competitive—more than 200 companies offer similar capabilities, and players such as Amazon, Microsoft, Alphabet, and Oracle are significantly larger than CoreWeave.

According to MarketWatch, 70% of analysts covering CoreWeave have assigned the company a “Buy” rating or equivalent. In October, after the sell-off began, Deutsche Bank and Bank of America reaffirmed their positive outlook on the company, pointing to strong business fundamentals amid demand for AI computing. For her part, Bernstein analyst Madison Rezaei—one of the few “bears” on Wall Street regarding CoreWeave— reaffirmed her “Sell” recommendation on October 22, citing vulnerabilities in the company’s business model.

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