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JP MORGAN: “WE BELIEVE THE CURRENT CONCERNS ON $CRWV ARE OVERDONE RELATIVE TO THE FUNDAMENTALS”
1. Datacenter demand is robust and has improved in recent months, rather than moderated, providing limited datapoints to support long-term datacenter demand concerns.
2. Bringing capacity online is materially tougher than the linear progression in relation to conversion of published contracted capacity to active capacity, and CoreWeave's execution leadership on this front has consistently stood out in our customer conversations.
3. Economics at a project level remain sound with the company positioned to generate both healthy margins and returns on cash flow, despite initial investment focus driving some temporary margin and cash flow hurdles.
4. Beyond the sound economics on a project for a typical 5-year contract agreement, there is an additional monetization lever in recontracting GPUs beyond the 5-year duration.
5. Project level returns (unlevered IRR) exceed cost of capital for the company.
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