JPMorgan analyst Samik Chatterjee reiterated an Overweight rating and a $125.00 price target on CoreWeave (NASDAQ: CRWV) after the stock declined approximately 20% in a week, closing most recently at $69.69.

According to a statement from the analyst, the sell-off was driven by concerns over rising bond yields and a Gartner forecast that raised questions about AI revenue needed to support returns for cloud infrastructure providers, stoking investor concerns about overcapacity and debt funding sustainability.

Chatterjee stated that "the current concerns are overdone relative to the fundamentals of the business," citing several factors, including robust and improving datacenter demand, CoreWeave's execution in bringing capacity online, sound project-level economics, and the ability to recondition GPUs beyond typical five-year contract terms.

The analyst also noted that project-level unlevered internal rates of return exceed the company's cost of capital, and that pricing power in the compute market may allow CoreWeave to pass increased capital costs on to customers.

The rating and price target were maintained despite the analyst acknowledging that rising yields and debt market pressures could limit the headroom for generating positive returns.