Investing.com -- UBS launched coverage of CoreWeave with a Buy rating and a $120 price target this week, implying about 40% upside, making a "non-consensus positive call" on the AI infrastructure provider.

Analyst Karl Keirstead acknowledged that Street sentiment on the stock is very cautious, reflected in a 2027 revenue multiple of just 3 times, but concluded that the main concerns, primarily leverage and credit risk, are peaking.

"A positive call on CoreWeave shares is a de facto call that investors will soon rotate back into the long-AI trade," he wrote, a scenario he sees as increasingly likely given muted sentiment and strong demand signals.

Keirstead said the market may be underappreciating the strength and durability of AI compute demand, including from enterprises rather than just frontier labs, along with GPU pricing trends that should lift CoreWeave's revenue per gigawatt from about $11 billion today to more than $15 billion over time.

He added that the company has built a reputation for reliability that sets it apart from peers.

The analyst also acknowledged risks, including high leverage against a backdrop of rising rates, uncertain long-term profitability in AI infrastructure, and customer concentration, with 72% of revenue from three customers. But he argued those concerns are more than priced in at 3 times 2027 revenue.

CoreWeave shares are up 19% this year and trade at 3 times revenue and 5.1 times adjusted EBITDA, below peers such as DigitalOcean and Nebius, which Keirstead said is "attractive for a company with 112% revenue growth facing material AI demand." His $120 target is based on 3.8 times 2028 sales.