CoreWeave's (CRWV) strong AI cloud demand, the company's market position, large backlog, and the chance for stronger cash flow over time could lift the stock after this heavy spending period ends, Oppenheimer said in a note Friday.

The biggest long-term driver is the fast growth of AI-focused cloud infrastructure, which is expected to expand much faster than the broader cloud services market, the investment firm said.

CoreWeave's vertically integrated platform, built specifically for large-scale AI workloads and supported by advanced software tools, sets it apart from both major cloud providers and rival GPU-as-a-service platforms, Oppenheimer said.

Oppenheimer said near-term pressure remains because CoreWeave needs to greatly expand power capacity to support its backlog, which will require high capital spending and add to debt.

Oppenheimer started coverage of CoreWeave with an outperform rating and a $140 price target, adding that many investors are still valuing CoreWeave mainly on near-term spending and leverage rather than its longer term earnings and cash flow potential.

Price: 75.56, Change: +0.74, Percent Change: +0.99