CoreWeave (CRWV): Reassessing Valuation After a Volatile Year of Strong Gains and Sharp Pullback

CoreWeave (CRWV) has had a wild run this year, with the stock up roughly 90% year to date but sliding about 40% over the past month. This has left investors reassessing its AI-driven growth story.

See our latest analysis for CoreWeave.

After a huge run earlier in the year, CoreWeave’s recent pullback and 30 day share price return of roughly minus 40% suggest momentum is fading in the short term, while its year to date share price return still points to a powerful longer term uptrend.

If CoreWeave’s swings have you rethinking your AI exposure, this could be a good moment to explore other high growth tech and AI names through high growth tech and AI stocks.

With the stock still up sharply this year but trading well below analyst targets, investors now face a pivotal question: Is CoreWeave an underappreciated AI infrastructure play, or has the market already priced in its future growth?

Preferred Price to Sales Ratio of 8.8x: Is it justified?

On a price to sales basis, CoreWeave trades at 8.8 times revenue, which screens as expensive against the broader US IT sector but still below many direct AI infrastructure peers.

The price to sales ratio compares the company’s market value to its annual revenue, a common yardstick for high growth, often unprofitable software and cloud names where earnings are not yet a reliable guide.

For CoreWeave, this 8.8 times multiple sits well above the US IT industry average of 2.4 times, implying investors are already paying a substantial premium for its rapid AI related growth. Yet it remains markedly cheaper than a peer average of 21.2 times and significantly below an estimated fair price to sales ratio of 27.1 times, a level the market could move toward if bullish growth and margin expectations are met.

Explore the SWS fair ratio for CoreWeave

Result: Price-to-Sales of 8.8x (UNDERVALUED)

However, CoreWeave’s heavy spending, ongoing losses, and dependence on buoyant AI demand mean that any slowdown or margin squeeze could quickly puncture the growth premium.

Find out about the key risks to this CoreWeave narrative.

Another View: Our DCF Model Flags Overvaluation

While the 8.8 times sales ratio suggests room to run versus peers and the fair ratio, our DCF model paints a starkly different picture, implying fair value near zero and flagging CoreWeave as severely overvalued. Is the market overestimating distant cash flows, or is the model missing an AI wildcard?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CoreWeave for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 933 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CoreWeave Narrative

If you see things differently or simply prefer to dig into the numbers yourself, you can build a custom CoreWeave thesis in just minutes, Do it your way.

A great starting point for your CoreWeave research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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