CoreWeave stock price popped by over 9% on Monday, reaching a high of $100 after Nvidia boosted its investment in the company.
Summary
- CoreWeave share price has formed an inverse head-and-shoulders pattern.
- Nvidia announced that it had invested another $2 billion in CoreWeave.
- Technical analysis suggests that the stock will likely continue rising.
CoreWeave, a former Bitcoin (BTC) miner, rose to its highest point since November 10 last year. It has jumped by nearly 60% from its lowest level in December.
The stock jumped after Nvidia, a major investor in the company, announced a $2 billion investment. Nvidia bought its common stock at $87, and is now its biggest investor. It had previously invested $6 billion in the company.
In addition to the investment, Nvidia announced that CoreWeave will be among the first companies to deploy its forthcoming products, including its upcoming CPUs.
CoreWeave stock remains 57% below its all-time high, with its valuation falling from $87 billion to the current $46 billion. This crash happened as investors remained concerned about the AI bubble and the growing costs of deploying its chips.
The most recent results showed that CoreWeave’s business continued doing well in the third quarter. Its revenue rose by 134% to $1.4 billion as its backlog jumped by 271% to $55.6 billion. Its capital expenditure rose to $1.9 billion, while its adjusted EBITDA rose by 61% to $838 million.
The company has benefited from the ongoing demand for AI data center spending. Most of the backlog is from OpenAI, which has pledged to spend billions of dollars buying data. Its other clients are companies like Microsoft, Cohere, IBM, and Meta Platforms.
Analysts believe that CoreWeave’s business will continue growing. Data compiled by Yahoo Finance shows that the revenue rose to $1.54 billion, bringing its annual revenue to over $5.12 billion. They also expect that the revenue will reach $12 billion this year.
Still, the main risk for the company is that competition has continued rising from companies like IREN, Bitfarms, and Nebius.
CoreWeave stock price technical analysis
The daily timeframe chart shows that the CRWV stock price popped and crossed the important resistance level at $100, its highest level since November 10. It formed an inverse head-and-shoulders, a common bullish reversal sign.
The stock has remained above the 50-day Exponential Moving Average, while the Relative Strength Index has continued rising and is nearing the overbought level at 70.
Therefore, the most likely CRWV stock forecast is bullish, with the next key resistance level being at $152, its highest level on October 10. This target is about 52% above the current level.