Shares shifted sharply higher as Bank of America doubled down on CoreWeave, the AI cloud infrastructure company that rents specialized computing power to businesses. The CEDEAR — a receipt that lets Argentine investors hold U.S.-listed shares locally — jumped 10.2% to $3.15, tracking a rally in the Nasdaq-listed stock after BofA reaffirmed its Buy rating, maintained a $140 price target, and hiked its 2026 capital spending estimate by $5 billion.
$34 Billion in Spending Signals Confidence — and Risk
BofA raised its 2026 capex forecast to $34 billion from $29 billion.
The figure is based on analysts' estimates, not new company guidance.
CoreWeave's CEO described demand as "overwhelming" and "insatiable," noting 2026 was "broadly sold out." But spending $34 billion in a year when analysts project a loss of $3.81 per share — with no profitability expected this year — means shareholders are funding a massive land grab with no near-term payoff.
A $99 Billion Order Book Looks Impressive, Until You Read the Fine Print
CoreWeave has signed take-or-pay contracts worth nearly $99.4 billion, including a $21 billion multi-year deal with Meta running through 2032. That backlog dwarfs projected spending, but these agreements span several years, and revenue is recognized only when sites are powered and equipped. Translation: the orders exist on paper, but cash arrives only when data centers actually switch on.
Margins Are Razor-Thin Now — the Ramp Must Be Flawless
BofA expects an operating margin of just 2.4% in Q2, slightly below consensus, but projects margins will improve to 14.6% by Q4, up from 1.0% in Q1. That trajectory hinges on scaling from roughly 1 gigawatt of active power today to 1.7 gigawatts by year-end.
If activation slips, margins can lag even if customer demand stays strong.
Competition Fears Aren't Going Away
The stock had dropped 12% the prior week on concerns that Meta and SpaceX were moving into cloud services.
BofA argues demand for AI computing far exceeds supply, and access to capacity — not provider choice — is the real bottleneck. Even so, debt has surged from $2 billion in 2023 to $35 billion , and Q1 free cash flow was negative $4.71 billion. BofA's bull case requires CoreWeave to convert expensive construction into billable computing power faster than rivals can catch up — a bet that only execution, not analyst notes, can validate.