The Biggest Concern Hanging Over CoreWeave Stock Has Finally Eased

CoreWeave (CRWV) has finally caught a break. The AI cloud company is teaming up with Leidos (LDOS), a big name in government technology and engineering. Together, they will provide AI cloud services to U.S. federal agencies. The work covers classified cloud services, intelligence support, cyber testing, and other secure government tasks. Prior to this deal, CRWV stock was down roughly 40% in the past month. The stock has now jumped nearly 22% in a single trading session since this announcement. The reason it made such a big impact on the market is because of how narrow CoreWeave’s customer base has been. Around 65% of its first-quarter revenue came from its two largest customers. CoreWeave’s dependence on a handful of customers for most of its sales has been a concern among investors. As I mentioned recently, one of those key customers, Meta (META), may even be building a rival cloud business of its own. Government contracts are usually long and spread across agencies, so the Leidos deal points toward a steadier, broader mix of income. 

Still, there are reasons to stay measured. The two firms gave no dollar figure for the deal. It also needs final agreements and depends on federal funding coming through, so nothing is locked in yet. That is a slow payoff for a company under real financial pressure. CoreWeave carries over $35 billion in debt, and roughly a quarter of its revenue goes into covering the interest alone. Steadier government income would help over time, but the Leidos deal does little for that debt today. The surge in stock price also looked bigger due to how far it had already fallen. The stock was oversold, and investors were ready to snap back on good news. 

Even so, breaking into federal work is a real step toward the broader customer base CoreWeave has needed. Government clients tend to stay for years, offering the steady revenue that has been missing. 

About CoreWeave Stock

CoreWeave is a cloud infrastructure provider specializing in GPU-accelerated computing for AI workloads. Its product portfolio includes AI cloud infrastructure, GPU compute instances, and cloud storage and networking solutions. Founded in 2017, the company is headquartered in Livingston, New Jersey, and is led by co-founder and CEO Michael Intrator. 

Over the last 12 months, CoreWeave’s stock has fallen 30%, sharply underperforming the Invesco QQQ Trust’s (QQQ) 21% gain during the same period. CRWV has fallen 28% in the past month alone, following reports that Meta is building a cloud business to sell its spare computing power. Investors were concerned that CoreWeave could lose one of its largest clients and gain a competitor at the same time. The Leidos deal helped the stock with a meaningful recovery towards the end of July.

CoreWeave is difficult to value on the usual measures. The company only went public in 2025, so there is no multi-year history to compare against. It is also not profitable yet, which makes the forward price-to-earnings (P/E) not meaningful for now. The forward price-to-sales (P/S) ratio of 2.62x looks reasonable for a company still growing sales at a rapid pace. EPS outlook is fairly volatile. Analysts expect losses to widen by roughly 183% in 2026. This, however, is expected to turn drastically, with earnings growth of 59% estimated in 2027, surging sharply to 152% in 2029. The swings reflect how early and unpredictable CoreWeave’s road to profit still is. The balance sheet is a real point of concern for investors. CoreWeave holds just $2.27 billion in cash against $35.15 billion in debt. This heavy debt is the reason every deal and every quarter carries so much weight. This is why the Leidos deal, as it widens the customer base and adds to the company's growth, made such a significant impact on CoreWeave’s stock. 

CoreWeave Raises Revenue Outlook Despite Heavy AI Investment

CoreWeave announced its Q1 fiscal 2026 earnings report on May 8. The company reported revenue of $2.08 billion, a 112% year-over-year (YoY) increase. The earnings per share came in at -$1.40, missing the forecast of -$0.91. The company’s adjusted EBITDA for Q1 was $1.2 billion. Moreover, its interest expense was $536 million, which was driven by increased debt to support continued scaling of the company’s infrastructure. 

Going forward, CRWV expects revenue in the range of $2.45 billion to $2.6 billion for Q2. For the full year 2026, the company raised its revenue guidance. It expects revenue between $12 billion and $13 billion. On a more positive front, the cloud infrastructure technology company expects to end 2026 with $18 billion to $19 billion of annualized run-rate revenue. However, it expects a rise in capital expenditure from $31 billion to $35 billion for 2026 due to component pricing increases. Keith Weiss from Morgan Stanley asked the management how higher component costs affect the company’s contracts, to which CEO Michael Intrator said that the company’s contracts are structured to account for component costs.

What Do Analysts Expect for CRWV Stock? 

Based on the 35 Wall Street analysts, CRWV stock holds a “Moderate Buy” rating with a mean price target of $136.15, indicating a 90% upside from the current share price. The majority of analysts remain bullish, with 20 holding a “Strong Buy” rating against just one holding a “Strong Sell.” The remainder have a “Hold” rating on the stock.