CoreWeave has over $100 billion of contracted work, but building it needs tens of billions of debt and new shares. I see 20% downside to $65.00 by Oct 2027, so I rate it sell.
Key points
- $104.2 billion backlog at June 30 2026, or contracted future sales before delivery, needs $35 billion to $39 billion of building in 2026 to convert.
- $35.6 billion debt principal at June 30 2026 plus $64.6 billion of lease promises in June 2026 leaves Q3 2026 interest near 3.9 times adjusted profit.
- $5.7 billion negative free cash flow in Q2 FY26, or cash left after building, shows 59% cash earnings in Q2 FY26 still burn cash.
The call
The market expects backlog to become valuable equity. Paying $81.61 a share in Oct 2026 needs about $23.0 billion of 2027 sales. Keeping a high 5 times sales price, or price for each dollar of sales, after heavy debt leaves no room for delay.
Quarterly revenue and free cash flow ($ billions)- Revenue
- My forecast
- Free cash flow
SEC XBRL facts to Q2 FY26; Q3-Q4 FY26E author estimates; Oct 8 2026.
I think debt and dilution weigh more than orders. I see $23.0 billion of 2027 sales, or total billed revenue for 2027, after strong growth. That growth still needs heavy borrowing, so equity is worth $65.00 a share in Oct 2027.
Valuation
| Step | Figure |
|---|
| 2027 sales estimate | $23.0 billion |
| Business value at 4 times sales | $92.0 billion |
| Less 2027 net debt after building | $51.7 billion |
| Equity value left for holders | $40.3 billion |
| Per share on 620 million shares | $65.00 a share |
What $65 target needs: 4 times 2027 sales after debtAuthor arithmetic on $23.0B 2027 sales, $51.7B net debt, 620M shares; Oct 8 2026.
Four times sales fits fast growers with heavy debt and no profit in 2026. It equals 6.9 times cash earnings in 2027, below dear AI peers. Down 20% to target versus up far more if orders fund themselves skews this to sell.
Risks
- Big customers pause AI spending in 2027, and quarterly revenue in late 2026 misses $3.53 billion Q3 2026 guide midpoint.
- Lenders tighten or rates jump in 2027, and drawn credit plus Q3 2026 interest above $900 million squeeze cash.
- Share count jumps fast in 2027 from the 35 million share sale plan, and filings show faster dilution than sales growth.
What would change my mind
I would turn positive if 2027 customer cash covered building with debt falling for two straight quarters.