CoreWeave Inc. (CRWV) shares declined 14% on Wednesday, marking their worst single-day fall in more than four months, following reports that Meta Platforms Inc. (META) is developing plans for a cloud computing business. The sell-off was triggered by concerns over potential competition in the cloud infrastructure market. However, Wall Street analysts see little risk to CoreWeave's core business and view the decline as a buying opportunity. Rosenblatt reiterated its 'Buy' rating on CoreWeave with a $250 price target, implying 192% upside from Wednesday's closing price, while Roth Capital analyst Rohit Kulkarni called the market reaction overdone. The cloud computing industry remains supply-constrained, with GPU shortages persisting across hyperscalers.
CoreWeave shares were up nearly 2% in Thursday's pre-market session, while Meta shares were down about 1%.
Rosenblatt and Roth Capital Maintain Buy Ratings on CoreWeave
According to TheFly, Rosenblatt said its channel checks show no change in hyperscalers' demand for GPU computing capacity, noting that GPU shortages remain the norm across the industry. Rosenblatt also said it does not believe Meta has the right to resell any of the CoreWeave capacity it has leased through 2032 to third parties, suggesting the reported plans should have little direct impact on CoreWeave's business.
The firm reiterated its 'Buy' rating on CoreWeave with a $250 price target, implying an upside potential of 192% from Wednesday's closing price.
Roth Capital analyst Rohit Kulkarni echoed similar sentiments, while adding that the market reaction to Meta's cloud business plans was overdone. Kulkarni said that the plans remain unconfirmed and would likely be constrained by available GPU capacity. He said investors were too quick to view the move as a competitive threat to neocloud providers such as CoreWeave and Nebius.
Kulkarni added that Meta's cloud ambitions could diversify its business by adding cloud and subscription revenue to a company that still derives about 98% of its revenue from advertising.
Meta Develops Plans for Cloud Infrastructure Business
According to a Bloomberg report citing people familiar with the matter, Meta is developing plans to launch a cloud infrastructure business to sell excess AI compute capacity to external customers. The company is also reportedly evaluating another plan to provide access to various AI models hosted on its existing infrastructure.
Meta's plans would put the company in competition with Amazon.com Inc.'s (AMZN) AWS, Microsoft Corp.'s (MSFT) Azure, and neocloud providers like CoreWeave.
CoreWeave Holds $35.2 Billion in Contracts with Meta Through 2032
Meta is an existing CoreWeave customer, having signed an expanded $21 billion deal in April this year. The $21 billion deal builds on a similar $14.2 billion agreement signed by CoreWeave and Meta in September 2025.
CoreWeave Stocks Up 20% Year-to-Date Amid Retail Bullish Sentiment
Retail sentiment on Stocktwits around CoreWeave trended in the 'bullish' territory, with message volumes at 'extremely high' levels at the time of writing.
CRWV stock is up 20% year-to-date, while META stock is down 7%. The Invesco QQQ Trust (QQQ) is up 33% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 45%.
FAQ
What caused CoreWeave stocks to fall on Wednesday?
CoreWeave stocks declined 14% on Wednesday following reports that Meta Platforms is developing plans for a cloud computing business to sell excess AI compute capacity to external customers.
Why do analysts view the CoreWeave stock decline as a buying opportunity?
Rosenblatt reiterated its 'Buy' rating with a $250 price target, stating that Meta does not have the right to resell CoreWeave capacity leased through 2032 and that GPU shortages remain the norm across the industry. Roth Capital analyst Rohit Kulkarni called the market reaction overdone, noting that Meta's plans remain unconfirmed and would be constrained by available GPU capacity.
What is the value of CoreWeave's contracts with Meta?
CoreWeave holds $35.2 billion in contracts with Meta, including a $21 billion expanded deal signed in April this year and a $14.2 billion agreement from September 2025, both running through 2032.
