STOCKS | CoreWeave Seen as the Best Buy Among New Cloud Names

CoreWeave has lagged rivals Nebius and Iren over the past year, but it remains ahead in building out its business and competing with established cloud providers. According to Sina Finance, analyst estimates compiled by S&P Global Market Intelligence put CoreWeave at 2.2 times expected 2028 revenue, versus about 2.7 times for Nebius and Iren. CoreWeave is also the largest of the three by current business scale, with expected revenue of $12.9 billion this year, about four times Nebius and roughly four times Iren. According to Sina Finance, CoreWeave has at least 51 operating data centers, 1.5 gigawatts of power capacity in service, and another 3.7 gigawatts under contract. The article said CoreWeave's valuation discount likely reflects concerns about customer concentration, especially its reliance on Microsoft, which still accounts for more than one-third of revenue. Other major customers include Meta and OpenAI. CoreWeave is also diversifying its customer base. According to Sina Finance, its largest customer accounted for 36% of revenue as of June 30, down from 71% a year earlier, while its second- and third-largest customers together contributed 36%. Paul Meeks, managing director and head of technology research at Freedom Capital Markets, said CoreWeave's delivery reliability and capital efficiency give it an edge. He concluded that CoreWeave is the best buy on valuation grounds, and Truist Securities said the company's valuation discount does not match its industry-leading position.