SKN | Bank of America Raises CoreWeave Revenue Outlook While Flagging Higher Financing Pressure

Key Takeaways:

• Bank of America maintained its Buy rating and $140 price target on CoreWeave following a stronger-than-expected second quarter.
• The bank raised its revenue forecasts through 2028 as CoreWeave expands active computing capacity and benefits from strong AI infrastructure demand.
• Despite the improved revenue outlook, BofA lowered its EPS forecasts, citing higher borrowing requirements associated with the company’s aggressive infrastructure expansion.
• For sophisticated investors, BofA’s revised model highlights the central tension in AI infrastructure: rapid revenue growth versus the cost of financing that growth.

Bank of America has recalibrated its CoreWeave outlook following the AI infrastructure provider’s latest earnings, raising its revenue forecasts while simultaneously reducing earnings-per-share expectations. The adjustment leaves the bank’s central view intact: BofA reiterated its Buy rating and $140 price target, indicating that it continues to see substantial value in CoreWeave’s expansion despite rising financing demands.

Why Bank of America Raised Its Revenue Expectations

CoreWeave’s second-quarter performance gave BofA greater confidence in the company’s growth trajectory. Revenue reached $2.575 billion, up 112% year over year and slightly ahead of the bank’s $2.52 billion forecast. Operating margin was also stronger than expected, reaching 5% compared with BofA’s 2.8% estimate.

The more significant development was infrastructure capacity. CoreWeave added 500 megawatts of active power during the quarter, taking active capacity to 1.5 gigawatts. Management subsequently raised its year-end target to at least 1.85 gigawatts, providing additional capacity to convert its substantial backlog into revenue.

Against that backdrop, BofA lifted its revenue forecasts for 2026, 2027 and 2028 to $12.84 billion, $25.96 billion and $41.03 billion, respectively, from previous estimates of $12.51 billion, $25.20 billion and $39.89 billion.

The Important Twist: Higher Revenue, Lower EPS

For BofA, however, stronger revenue does not automatically translate into stronger near-term earnings. The bank reduced its EPS forecasts, now projecting losses of $3.93 per share in 2026 and $0.89 in 2027, before $2.68 of EPS in 2028.

The reason is straightforward: CoreWeave must finance a substantial infrastructure buildout. Higher borrowing costs associated with that expansion can absorb part of the economic benefit created by faster revenue growth.

BofA Sees Better Margins Beneath the Surface

Interestingly, the lower EPS forecasts were accompanied by an improved operating-margin outlook. BofA expects operating margins to reach approximately 8.3% in 2026, 15.9% in 2027 and 19% in 2028. It also expects margins to accelerate as recently activated infrastructure begins contributing to revenue.

The bank noted that contracts signed during the second quarter carried contribution margins 5 to 10 percentage points above earlier agreements, while CoreWeave implemented an almost 25% price increase in July. That combination suggests improving pricing power could eventually make incremental capacity more profitable.

What BofA’s Revised Model Really Signals

For HNWI investors, the significance of BofA’s update lies in the distinction between growth quality and growth speed. The bank remains constructive because stronger demand, additional capacity and improving contract economics could support substantially higher margins over time. Yet customer concentration, supplier dependence, competition from Microsoft, Google and Amazon, and stock-price volatility remain material considerations.

BofA’s revised outlook therefore presents CoreWeave as a company with considerable operating potential, but one whose financial trajectory depends heavily on disciplined capital deployment. For sophisticated portfolios, the key variable to monitor is whether the company can turn its expanding infrastructure footprint into sufficiently high-margin revenue to justify the financing required to build it.

For a confidential discussion regarding cross-border wealth structures, institutional banking relationships and the implications of AI infrastructure growth for global portfolios, contact our senior advisory team.