Is CoreWeave now the leading AI stock?

CoreWeave (CRWV) stock is drawing plenty of eyeballs on Tuesday as shares of the AI cloud operator shot up over 23% by the afternoon. The excitement for CoreWeave stems from a $15 billion deal between it and Applied Digital (APLD), in which the latter will develop and operate 400 megawatts of data centers that it will lease exclusively to CoreWeave for its AI platform.

Applied Digital said the deal would likely mean $7 billion in revenue over a 15-year period. While CoreWeave is the customer, experts believe the deal places CoreWeave in league with major hyperscalers like Microsoft's (MSFT) Azure and Amazon's (AMZN) AWS.

Nvidia (NVDA), the godfather of AI stocks, is up 3% at the same time, but investors note that it invested in CoreWeave at a $2 billion valuation. As of Tuesday, CoreWeave is now a nearly $60 billion stock. Trading above $148 on Tuesday, CoreWeave IPO'd at $40 per share just two months ago.

US stocks in focus

US stocks have also perked up on Tuesday with the NASDAQ leading at 0.9% and the Dow Jones Industrial Average (DJIA) garnering a 0.5% advance. Equity markets gained on data that showed job openings rising in the US. However, the Organisation for Economic Co-operation & Development (OECD) predicted that the US economy will see growth fall from 2.2% in 2024 to 1.6% in 2025.

Bank of America announced in its weekly flows report that retail traders and hedge funds were again in buying mode last week, while institutions were net sellers for the fourth consecutive week. Inflows last week heavily favored financials, while tech stocks saw their third straight week of outflows.

CoreWeave stock news

Investors are warming to the fact that CoreWeave has approximately $29 billion in backlog deals. The deal with Applied Digital was announced on Monday, but only the latter saw its share price skyrocket. On Tuesday, it appears to be CoreWeave's turn as investors took a day to understand the deal.

Now the share price is leading Wall Street by a large stretch. Last week, Barclays introduced the highest target price for the company on Wall Street, suggesting it would be worth $100 a share in 12 months. At $148 on Tuesday, it would seem the analysts need to catch up. In mid-May, Citi Research more than doubled its price target on CoreWeave stock from $43 to $94.

Under the agreement with Applied Digital, Coreweave will lease 250 megawatts of IT critical load to host CoreWeave's AI infrastructure at the former's data center campus in North Dakota. CoreWeave also retains the option to access an additional 150 megawatts of critical IT load at the campus.

The first 100-megawatt data center will be completed by the end of the fourth quarter, according to Applied Digital. The second data center, 150 megawatts of compute, will be finished by mid-2026. The third optional 150-megawatt data center will be finished in 2027.

This deal follows a 260-megawatt agreement that CoreWeave signed with Mike Novogratz's Galaxy Digital Holdings (BRPHF) for space at a West Texas data center. In mid-May, CoreWeave signed a separate $4 billion agreement with OpenAI. Founded in 2017, CoreWeave already operates 33 data centers across the US and Europe.

CoreWeave stock chart

CoreWeave's share price easily took out the $130.76 former all-time high from May 29. Now, as CRWV stock heads into no man's land, the Fibonacci Extension becomes the most-watched fortune teller. That fortune appears to give the 161.8% Fib at $161.90 and the 261.8% Fib at $197.13 as suitable price targets.

If CRWV traders choose instead to take profits off the table, then the best bet is the former ATH of $130.76. Much stronger support from late May sits at $105.00.

CRWV 4-hour stock chart