JPMorgan upgraded CoreWeave to Overweight from Neutral on Thursday and raised its December 2027 price target to $125 from $120, arguing that stronger pricing for AI computing capacity is improving the economics of the cloud provider's new contracts. Separately, BNP Paribas Exane upgraded Nebius Group to Outperform from Neutral and lifted its target to $399 from $260.
JPMorgan analyst Samik Chatterjee said demand for computing capacity strengthened this year and pushed prices higher across the industry. He noted that CoreWeave raised prices by 25% across its products in July, that rival Nebius has raised prices frequently, and that short-term compute pricing at some competitors runs at almost three times what CoreWeave charges on longer-term contracts. That gap, he said, gives CoreWeave room to improve the economics of new agreements.
CoreWeave has said contracts signed in its fiscal third quarter were priced at about $40 million per megawatt, and management has said stronger pricing is adding 5 to 10 percentage points to contribution margins on new contracts compared with earlier ones. Chatterjee said that dispels concerns that higher prices are purely a pass-through of higher costs. Contracted power capacity has grown from 3.1 gigawatts at the end of 2025 to 4.2 gigawatts as of Aug. 11, evidence that customers continue to commit to the platform.
The target implies roughly 42% to 44% upside from a share price near $86.90, and it comes after a range-bound year for the stock even as the company raised every component of its 2026 guidance. JPMorgan said improving forecasts contrast with a lackluster share price shaped by investor concerns about capital intensity. CoreWeave has continued to raise funds for its buildout, including a $3.7 billion convertible debt offering and an at-the-market program covering up to 35 million Class A shares, which the new target accounts for. The company reported $5.13 billion in revenue for 2025, up 168% from the prior year.
Premarket reaction was muted. CoreWeave gained as much as 1.5% before paring most of the advance as weakness spread across the broader market, while Nebius rose about 1.5%. UBS initiated coverage of CoreWeave with a Buy rating and $120 target earlier this week, and TD Cowen upgraded the stock to Buy in July, extending a run of positive analyst actions. Consensus among analysts remains Moderate Buy for both stocks.
The broader backdrop is challenging. Treasury yields are at multi-decade highs, with the 10-year near 5.15%, and the Nasdaq Composite closed Wednesday down 1.13%. Capital-intensive AI infrastructure companies rely on debt and equity markets to fund data center expansion, so rising rates directly affect their cost of capital. A separate report on Thursday about a delayed-payment clause tied to a large AI data center weighed on a major cloud provider, a reminder that execution risk remains high across the sector.
Investors weighing neocloud exposure should balance the pricing-power thesis against financing costs and dilution from at-the-market offerings. If compute scarcity keeps short-term rates elevated, providers with contracted capacity coming online could see margin expansion, but a further rise in yields or a pullback in AI spending would test those assumptions quickly.