Goldman Sachs Just Upgraded CoreWeave Stock, but Leverage Raises Red Flags for Nervous Investors

The shares of CoreWeave (CRWV) rallied over 6% in premarket trading on Monday after investment banking major Goldman Sachs upgraded the AI cloud infrastructure company to “Buy” from “Neutral.” Gabriela Borges downgraded the price target from $129 to $106 but pointed out that the economics of the contracts of CoreWeave can turn out to be much better than anticipated by the market.

The upgrade has come at a very interesting stage for CRWV. Despite massive demand for AI infrastructure computing capacity, the stock has been under immense pressure recently, losing 21% over the last five trading days, and it notably still closed the day flat. The shares now trade near $64, well below their 52-week high of $141.79, which means more than 55% below the annual peak. This situation makes the upgrade of the analysts from Goldman Sachs very interesting indeed.