Update: CoreWeave Execution Outweighs Financing Worries, BofA Says

05:14 PM EDT, 10/15/2026 (MT Newswires) -- (Updates to add background in second paragraph, estimates in paragraph five and six and updates headline) CoreWeave's (CRWV) ability to bring active power online at scale, combined with higher pricing from Nvidia's Vera Rubin deployments, should drive faster revenue growth than previously expected, BofA said in a note Thursday. CoreWeave shares fell 15.5% Wednesday amid a selloff, as yields on its debt continued to climb. The yield to maturity on its 9.75% bond due 2031 reached 15.78%. BofA said the decline likely reflected concerns over financing hurdles for AI infrastructure companies. The brokerage said CoreWeave's contract structure helps contain the risks of its heavy spending. The company leases data centers from diversified third-party developers rather than building them, signs back-to-back deals with infrastructure providers and customers, and often receives prepayments of about 50% of contract value. Its five-year contracts with investment-grade hyperscalers also support project-level financing, BofA said. Still, BofA's forecasts show the strain of the buildout. It expects negative free cash flow of about $23.8 billion in 2026, $24.8 billion in 2027 and $18.2 billion in 2028. Long-term debt is seen rising to $73.5 billion in 2028 from $34.5 billion in 2026, with interest cover at 0.3 times in 2026 and only 1.4 times in 2028. BofA does not expect a profit until 2028. BofA reiterated its buy rating and $140 price target.