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CoreWeave Inc CRWV is scheduled to report its second-quarter results in early August. Data center buildout execution and power becoming active are "the primary variables to watch" as the company continues to scale its infrastructure, according to BofA Securities analyst Tal Liani.
The CoreWeave Analyst: Liani maintained a Buy rating and price target of $140.
The CoreWeave Thesis: Given elevated demand for GPU capacity and growing customer commitments, execution has become the key variable, Liani said in the note.
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He added that there are three areas of focus in CoreWeave’s results:
- Continued data center activation and overall buildout execution
- Capital expenditure intensity
- Margin progression through the remainder of the year
Larger Capacity In H2: The company currently operates with around 1GW (gigawatt) of active power and is targeting to reach 1.7GW by year-end, the analyst noted. This implies "a meaningful acceleration in capacity deployment over the next few quarters," he added.
A larger portion of this capacity is likely to come online in the back half of 2026 than over the first six months, Liani said. Due to this, BofA’s year-on-year revenue growth estimates reflect an exponential acceleration, from 108% in the second quarter, to 150% in the third and 186% in the fourth quarter of 2026.
Focus On Margin As Capex Increases: "Capital expenditures remain a key indicator of buildout progress and pricing levels of key hardware components," the analyst wrote. He raised the full-year capex estimate to $34 billion, from the prior projection of $29 billion.
CoreWeave is likely to report its second-quarter operating margin at 2.4%, missing Street expectations of 2.8%, Liani said. He expects margins to improve sequentially throughout the rest of the year.
With incremental active power driving revenue recognition, CoreWeave could exit 2026 with a operating margin of 14.6%, versus 1.0% in the first quarter, the analyst stated.
Although the stock has been under pressure due to concerns around intensifying competition, primarily from Space Exploration Technologies Corp SPCX and Meta Platforms Inc META, the demand for AI compute "far exceeds supply, and access to capacity, rather than provider selection, is the primary gating factor," he further wrote.
CRWV Price Action: Shares of CoreWeave had risen by 3.42% to $75.71 at the time of publication on Monday.
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This article CoreWeave Q2 Preview: Expect 108% Revenue Growth, Margin May Disappoint originally appeared on Benzinga.com.
