CoreWeave, Inc. (NASDAQ: CRWV) saw its stock plummet 5.21% in pre-market trading on Wednesday, as analysts cautioned investors about the company's rapid ascent and potential overvaluation. The artificial intelligence infrastructure specialist has experienced a meteoric rise of 200% year-to-date, defying broader market trends.

MoffettNathanson analyst Nick Del Deo expressed a cautious stance on CoreWeave shares, stating that the recent stock surge doesn't correspond with a dramatic improvement in the company's fundamentals. Del Deo highlighted concerns about the stock's thin float and trading dynamics, which have likely played a significant role in the price movement. While maintaining a neutral rating, he raised his price target to $56 from $43, still well below the current trading price.

Despite CoreWeave's impressive 420% year-over-year revenue growth in the first quarter and a significant $11.9 billion contract with OpenAI, investors are becoming wary of potential risks. These include the company's widening net losses, high capital expenditures, and customer concentration, with Microsoft accounting for 62% of 2024 revenue. As the AI infrastructure market becomes increasingly competitive, with traditional cloud providers like Amazon and Microsoft potentially leveraging their massive balance sheets, CoreWeave's ability to maintain its growth trajectory may face challenges.