JPMorgan upgrades CoreWeave on stronger compute pricing

Investing.com -- JPMorgan upgraded CoreWeave (NASDAQ: CRWV) to Overweight from Neutral in a note Thursday, telling investors that stronger pricing for computing power and the company's push into short-term contracts at premium rates should lift revenue and margins.

Analyst Samik Chatterjee raised his December 2027 price target to $125 from $120, implying 42% upside from current levels.

The analyst stated that demand has strengthened this year and pushed prices higher. He pointed to 25% price changes across CoreWeave's products in July and frequent price increases at rival Nebius.

He also noted that short-term compute pricing at some rivals is running at almost three times what CoreWeave charges on longer-term contracts. CoreWeave recently said contracts signed in its fiscal third quarter came in at about $40 million per megawatt.

Management has said the stronger pricing is adding 5 to 10 percentage points to contribution margins on new contracts compared with earlier ones. Chatterjee believes this is "dispelling any concerns that the higher price is purely a pass-through of higher costs."

He acknowledged investor worries about how much capital CoreWeave needs to expand capacity. However, he believes "the raise in pricing and margins will overwhelm the increase in debt to fund the capex build to create robust upsides to the equity valuation."

JPMorgan noted that the shares have traded in a narrow range this year, even though CoreWeave has raised every part of its 2026 outlook. Contracted power has grown from 3.1 gigawatts at the end of 2025 to 4.2 gigawatts as of Aug. 11.

The new target also accounts for dilution from CoreWeave's announced at-the-market share offering.

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