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The setup
CoreWeave is heading into its Q2 report with Wall Street doing that classic thing where it cheers the growth story while side-eyeing the bill. BofA Securities kept a Buy rating and a $140 price target, saying the key variables are data center execution, power coming online, and how ugly margins get while the company keeps scaling.
Growth is great. Plumbing is better.
The analyst’s big takeaway is basically: demand for GPU capacity is still wild, but the bottleneck is no longer just customer appetite — it’s whether CoreWeave can actually light up enough infrastructure. The company reportedly has about 1GW of active power today and wants to get to 1.7GW by year-end, which is a big “the machine is still under construction” vibe.
That’s why BofA is modeling revenue growth that goes from 108% in Q2 to 150% in Q3 and 186% in Q4. Translation: the stock story still hinges on whether capacity keeps showing up on time, like a very expensive delivery app.
The margin catch
Here’s the part investors will be staring at through their fingers: BofA thinks CoreWeave’s Q2 operating margin could land at 2.4%, below the Street’s 2.8% expectation. Not a disaster, but definitely not the kind of number that gets champagne corks popping.
The good news? The analyst expects margins to improve as more power comes online and revenue recognition catches up with all that capex. The not-so-good news? Full-year capex was lifted to $34 billion from $29 billion, which is a reminder that building AI infrastructure is basically a cash bonfire with server racks.
Why the market cares
CoreWeave stock has been under pressure as investors worry about competition, especially from Meta Platforms and SpaceX. But BofA argues the bigger picture is that AI compute demand still outweighs supply — meaning customers care more about getting capacity than picking the prettiest vendor brochure.
Big picture: CoreWeave is still in the “grow now, explain margins later” phase. If the buildout keeps clicking, the revenue math gets exciting fast. If it stalls, the stock could stay in the penalty box.