CoreWeave (CRWV): Valuation in Focus After Landmark $14.2 Billion Meta Platforms Deal

CoreWeave, Inc. has drawn fresh attention from investors after announcing a $14.2 billion agreement with Meta Platforms to provide cloud computing capacity through 2031, with an option for further expansion.

This long-term deal not only strengthens CoreWeave’s position as a major supplier of AI infrastructure, but also broadens its client base beyond previous partnerships. The move highlights increasing demand for scalable and advanced cloud resources as AI adoption grows.

See our latest analysis for CoreWeave.

The Meta announcement sent CoreWeave’s share price soaring by double digits, capping a standout month for the stock. That momentum follows a string of record-breaking, multi-billion-dollar deals, including an expanded $6.5 billion partnership with OpenAI, which have helped CoreWeave outpace peers and reinforce investor confidence in its growth story. After a rollercoaster summer, the stock’s YTD share price return now sits at 2.45%, reflecting renewed optimism around its expanding role in AI infrastructure and future contract pipeline.

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Yet with shares already surging on big-ticket deals and optimism running high, investors must ask: is CoreWeave undervalued in light of its rapid pipeline growth, or is all the blue-sky potential already priced in?

Price-to-Sales of 20.3x: Is it justified?

CoreWeave trades at a price-to-sales ratio of 20.3x, putting it at a premium versus the broader US IT sector average of 2.4x. This signals that the market has sky-high growth expectations for the company, particularly given the surge in cloud infrastructure demand.

The price-to-sales multiple reflects how much investors are willing to pay for every dollar of CoreWeave’s revenue. For a high-growth, still-unprofitable company like CoreWeave, this multiple serves as a key yardstick for the valuation of future earnings potential, since profits are not yet being realized on the bottom line. The current level highlights market enthusiasm for CoreWeave's strategic partnerships and scale as an AI infrastructure provider.

Compared to other industry players, CoreWeave’s premium valuation is hard to ignore. While peers command far lower price-to-sales ratios, CoreWeave’s stands out as aggressive. However, regression analysis suggests that the price could move even higher, as the estimated fair price-to-sales ratio is 47.8x. If investor sentiment shifts, the valuation multiple may have significant room to run.

Explore the SWS fair ratio for CoreWeave

Result: Price-to-Sales of 20.3x (UNDERVALUED)

However, CoreWeave’s high valuation leaves little margin for error if revenue growth stalls or if competition in AI infrastructure intensifies unexpectedly.

Find out about the key risks to this CoreWeave narrative.

Another View: Our DCF Model Weighs In

Looking at CoreWeave through the lens of the Simply Wall St DCF model offers a different angle on its valuation. Based on future cash flow projections, the DCF result suggests the company is currently trading 32.8% below its estimated fair value. This indicates potential undervaluation compared to the current market price.

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 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

Of course, if you have your own take or want to dig deeper, you can independently analyze the numbers and craft your own perspective in minutes. Do it your way.

A great starting point for your CoreWeave research is our analysis highlighting 3 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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