Shares of CoreWeave, Inc. (CRWV) tumbled 5.06% in after-hours trading on Tuesday, following a downgrade from Barclays despite a significant price target increase. The move comes amid growing concerns about the company's valuation after its recent explosive rally.

Barclays analyst Raimo Lenschow downgraded CoreWeave to Equal Weight from Overweight, citing valuation concerns. However, the firm simultaneously raised its price target to $100 from $70, reflecting the stock's recent surge. Lenschow noted that while the firm continues to like CoreWeave's role in the new generative AI world, the current valuation "could be stretched to move higher off fundamentals in the near term."

The downgrade follows CoreWeave's impressive 177% gain from its $40 IPO price. Analysts have pointed to the stock's thin float as a factor in its dramatic rise, with trading dynamics potentially playing a larger role than fundamental improvements. As the lockup period expires this summer, increasing the available float, some experts are advising caution. MoffettNathanson analyst Nick Del Deo, while raising his price target to $56 from $43, maintained a neutral stance and warned investors against touching the stock "either way" due to its volatile nature.