CoreWeave Bulls Should Brace For 'Wild, Lumpy, Volatile Ride,' JPMorgan Says

CoreWeave Inc. (NASDAQ:CRWV) is still one of the brightest stars in the AI infrastructure galaxy — but JPMorgan says the flight path just got turbulent. Analyst Mark R. Murphy trimmed his rating to Neutral with a $110 price target (from $135), warning that while CoreWeave's long-term opportunity remains "tremendous," investors should brace for what he calls a "wild, lumpy, volatile ride."

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The downgrade follows an eventful third quarter, during which backlog nearly doubled to a record $56 billion, even as supply chain snags began to ripple through its data center expansion plans.

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Supply Chains Slow The AI Engine

Murphy says the biggest speed bump came from a single third-party data center developer that fell behind schedule — delaying construction and forcing CoreWeave to shift revenue from the fourth quarter into the first. That hiccup prompted management to cut FY25 revenue guidance by $150 million and lower CapEx by $8.5 billion.

He calls this "a capacity-constrained quarter," underscoring that even CoreWeave — once seen as the AI cloud upstart immune to big-tech bottlenecks — is now feeling the same global squeeze on power and compute infrastructure.

Still, the company's momentum remains impressive: revenue grew 134% year over year, operating income came in $40 million ahead of estimates, and new customers like Crowdstrike Holdings Inc (NASDAQ:CRWD), Rakuten Group Inc (OTCPK:RKUNY), Poolside AI, Jasper Therapeutics Inc (NASDAQ:JSPR), and NASA joined the client list.

Sovereign demand is also taking shape through CoreWeave Federal, serving agencies like NASA's Jet Propulsion Lab and the UK government.

Long-Term AI Story Still Intact

Despite the near-term turbulence, JPMorgan remains fundamentally constructive. Murphy expects CoreWeave's revenue to grow 166% in FY25 and forecasts CapEx in 2026 to more than double — signaling confidence in demand for AI compute capacity.

But investors may need patience. "We continue to view CoreWeave as a tremendous long-term opportunity," Murphy writes, "yet the stock's path will likely remain a wild, lumpy, volatile ride requiring a higher risk tolerance than most investors possess."

In short: CoreWeave's backlog shows AI demand remains strong — delivery timing is what's shifting.

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