CoreWeave: The Misunderstood Titan of the AI Age
- LaFoy O. Thomas III, Esq.
- Nov 30, 2025
- 5 min read
Updated: Dec 3, 2025
THOMAS THIRD CAPITAL, LLC
Date: Sunday, November 30, 2025
Company: CoreWeave (CRWV)
Current Price: $73.12
Target Price (24-Month): $725.00 (+891% Upside)
COREWEAVE (CRWV): The Misunderstood Titan of the AI Age
Executive Summary
At Thomas Third Capital, we believe the market is currently offering a life-changing opportunity in shares of CoreWeave (CRWV). Closing Friday at $73.12, the stock is trading at a valuation that fundamentally disconnects from its trajectory as a pillar of the global AI economy. While the market focuses on short-term volatility and widely misunderstood debt structures, CoreWeave is experiencing a decreasing cost of capital and is executing on the most aggressive and secure growth strategy in the history of cloud computing.
We are predicting a 24-month price target of $725, representing a market cap of ~$360 billion. We believe CRWV is not merely a "chip renter," but the vertically integrated Essential AI Cloud.
1. Valuation: A Dislocation in Reality
The numbers scream "Deep Value." At a market cap of $36.4 billion ($53.3B Enterprise Value), CRWV is trading at multiples that suggest stagnation, yet the company is hyper-scaling.
Current Metrics: The stock trades at 8.45x TTM Price-to-Sales (P/S).
2026 Forecast: With expected revenue of $12.07 billion, the stock is trading at just 3x 2026 revenue.
2027 Forecast: With revenue scaling to over $18 billion, shares are trading at a negligible 2x 2027 revenue.
For a company growing triple-digits in the most critical sector of the economy, a 2x-3x forward multiple is absurdly low. We expect significant multiple expansion as the market digests the durability of this revenue. Our base case assumes a P/S expansion to roughly 20x as volatility settles post-2026 midterms.
2. Hyper-Growth: The Backlog Story
The demand signal is not just strong; it is accelerating. CoreWeave’s backlog (including Remaining Performance Obligations) grew 85% sequentially from Q2 to Q3 2025.
Q2 2025 Backlog: $30.1 Billion
Q3 2025 Backlog: $55.6 Billion
The Quality of Revenue
This backlog is backed by the strongest balance sheets in the world. In Q3 alone, CoreWeave:
Secured a $14.2 billion multi-year contract with Meta.
Expanded commitments with OpenAI by $6.5 billion.
Became the first provider to deploy Nvidia’s cutting-edge GB300 NVL72 systems.
Revenue growth is matching the backlog explosion. Q3 2025 revenue hit $1.364 billion (up 134% YoY). From $228.9M in 2023 to a projected $5.12B to end 2025, CoreWeave is demonstrating execution perfection.
3. The "Success-Based Financing" Arbitrage
The single biggest source of "Fear, Uncertainty, and Doubt" (FUD) regarding CoreWeave is its debt load. Analysts and members of the finance media have repeatedly miscategorized this leverage. This is not speculative debt; it is success-based financing.
How It Works (The Flywheel):
Contract First: CoreWeave secures a guaranteed, take-or-pay contract from a AAA-tier client (e.g., Microsoft, Meta).
Asset-Backed Loan: They utilize a lending syndicate including Blackrock, Blackstone, Carlyle, and Magnetar to finance the specific hardware for that contract.
Self-Amortization: The debt service (principal + interest) is designed to be fully paid off by the revenue from the contract during the contract term.
Residual Gold: Once the contract ends and debt is zero, CoreWeave owns the infrastructure outright, which will retain significant value after the life of the contract.
The "Dot Com" Fallacy
Comparing CoreWeave to the fiber-optic buildout of 2000 is intellectually lazy and incorrect.
Dot Com Bubble: Built infrastructure in anticipation of demand that arrived 5-10 years later than expected. Result: Massive surplus of capacity and widespread bankruptcies of internet companies.
CoreWeave: Builds infrastructure only in response to signed, irrevocable contracts. Result: Guaranteed profit spread and asset ownership.
Naturally Deleveraging
Because the debt pays for itself through the life of the contract, the balance sheet naturally deleverages over time without diluting shareholders. This is a masterclass in capital efficiency.
4. Depreciation and The "Long Tail" of Compute
Critics argue that CoreWeave’s 6-year straight-line depreciation schedule is too aggressive given the speed of Nvidia’s release cycle. We disagree.
The Inference Value Proposition
While cutting-edge chips (like the GB300) are needed for training frontier models, older generations are perfectly capable and highly profitable for inference (running the models).
Proof Point: Due to a shortage of available compute for AI that is expected to persist for the foreseeable future, CoreWeave recently was able to re-lease older Hopper (H100) infrastructure after a lease expiry at 95% of the original price.
Longevity: Direct-to-chip liquid cooling in CoreWeave’s advanced data centers significantly reduces thermal stress, extending the physical lifespan of the GPUs well beyond industry standards.
Furthermore, we believe classifying GPU depreciation as a Technology & Infrastructure Operating Expense (rather than Cost of Revenue) is appropriate under GAAP for a company selling a full-stack capability, not just bare metal.
5. Vertical Integration: The "Full Stack" Moat
CoreWeave has quietly transformed from a hardware provider to a software ecosystem through strategic acquisitions. This is no longer just a "cloud"; it is a development platform.
Weights & Biases: The absolute standard for MLOps and experiment tracking. Used by OpenAI for developing and training of its models, including GPT-4. By acquiring Weights & Biases, CoreWeave owns the "GitHub" of the AI model building process.
OpenPipe: A leader in developing AI agents and fine-tuning labs. This allows CoreWeave to help customers make their models smaller, faster, and cheaper to run—locking them into the CoreWeave ecosystem.
Monolith AI: Specializes in AI for engineering. This expands CoreWeave's TAM (Total Addressable Market) beyond LLMs into industrial R&D.
Marimo: Next-generation reactive Python notebooks. This captures the developer workflow at the very beginning of the coding process.
The Verdict: These acquisitions make CoreWeave sticky. Customers come for the GPUs, but they stay for the integrated software stack that accelerates their time-to-market.
6. CoreWeave Ventures: The Trillion-Dollar Call Option
We are incredibly bullish on the launch of CoreWeave Ventures. By offering capital and guaranteed compute access to startups in exchange for equity, CoreWeave is positioning itself as a "Kingmaker" of the AI application layer.
CoreWeave will likely find itself on the cap table of the next Google, Microsoft, or Amazon. While there will likely be failures in the portfolio, the access to the world’s best GPUs attracts the world’s best founders. We believe this venture arm alone represents a potential trillion-dollar market cap opportunity over the next two or three decades.
Conclusion and Price Target
CoreWeave is the only cloud provider to earn the Platinum ClusterMAX rating from SemiAnalysis, and CoreWeave has earned that rating two years in a row. The company has early access to the best hardware, smart financing, a deep and fast-growing backlog, and a software moat that is rapidly widening.
The market’s misunderstanding of "self-amortizing debt," and the longevity and residual value of Nvidia's latest GPUs has created a window to buy a generational asset at 2x 2027 sales.
We reiterate our conviction. Target: $725 / share by December 2027. Outlook: Extremely Bullish.
Disclaimer: I/We maintain a long position in CRWV. This report is for informational purposes only and does not constitute financial advice.
For basic and advanced financial literacy, please go to Amazon and support my books Generational Wealth: Beginner's Business & Investing Guide, which was previously a #1 Amazon best seller, and1,000% Returns: Taking Advantage of the Stock Market's Gross Incompetence.
https://www.amazon.com/000-Returns-Advantage-Markets-Incompetence/dp/B0B1C6YKGD/ref=tmm_pap_swatch_0
You can also support and show your appreciation by leaving a gift using the tip jar near the bottom of the page.
Comments