CoreWeave's Bond Selloff May Overstate Debt Risks, Oppenheimer Says

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CoreWeave's (CRWV) unsecured bond selloff amid rising interest rates and graphics processing unit obsolescence fears may be putting "unnecessary pressure on the equity valuation," Oppenheimer said in a report Tuesday.

The firm estimated about $83 billion in "recoverable assets" against roughly $42 billion in pro forma debt and $37 billion in other liabilities, supporting a full recovery for unsecured debt in a "worst-case" liquidation scenario. Servers remaining "productive" beyond their accounting depreciation periods could also extend revenue generation and boost cash flow.

Halting growth capital spending in 2027 or 2028 could generate annual free cash flow to the firm of about $9 billion or $16 billion, respectively, at steady state. However, Oppenheimer expects CoreWeave to continue its planned expansion and described near-term capital spending and debt concerns as "short-sighted," according to the report.

The investment firm expects CoreWeave to beat Q3 expectations and modestly raise its full-year revenue outlook to 160% year-over-year growth, supported by increasing capacity and pricing. Additional capacity, software capabilities and higher-value workloads could provide greater upside in 2027.

Oppenheimer reiterated an outperform rating and $150 price target on CoreWeave.

CoreWeave shares were up nearly 6% in Tuesday trading.

Price: 58.45, Change: +3.26, Percent Change: +5.91

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