CoreWeave Shares Rise as BofA Boosts Capital Expenditure Forecast

Shares in AI cloud infrastructure provider CoreWeave gained 2.3% in pre-open trading after BofA Securities reiterated its bullish outlook on the company. The bank maintained its Buy rating and $140 price target, citing sustained demand for artificial intelligence infrastructure.

Analyst Boosts Spending Outlook

In a note to clients, BofA Securities raised its fiscal 2026 capital expenditure (capex) estimate for CoreWeave to $34 billion, a significant increase from its previous forecast of $29 billion. The bank attributed the revision to evolving market dynamics in hardware procurement and robust demand for AI computing resources.

This higher capex forecast signals that analysts anticipate strong, continued growth and a need for CoreWeave to aggressively expand its GPU cloud platform to meet client needs. The move suggests confidence in the company's long-term revenue trajectory, even as it invests heavily in its infrastructure.

Acknowledging Near-Term Headwinds

While the overall view was constructive, the BofA note offered a nuanced perspective on near-term profitability. The bank projects an operating margin of approximately 2.4% for the second quarter of 2026, which is slightly below the broader Wall Street consensus of around 2.8%.

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However, BofA anticipates that margins will improve sequentially through the second half of the year, allowing the company to end the fourth quarter on a stronger financial footing. This forecast of a margin recovery appears to be a key factor reassuring investors after a recent period of selling pressure on the stock.

Market Context and Investor Sentiment

The positive analyst commentary provided a catalyst for a stock that has been under pressure from concerns about competition and interest rate sensitivity, given CoreWeave's significant debt load. The broader market provided a supportive backdrop, with major indices trading higher.

Elevated activity in call options, particularly for August expiry contracts, also suggests that some traders are positioning for a near-term rebound. The BofA note helped crystallize a more risk-on tone for the stock, which analysts noted had become oversold relative to its 52-week high.