CoreWeave stock soared on Wednesday after the company reported Q3 results.
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CoreWeave is igniting a fresh rally in the AI trade on Wednesday.
The stock is rallying after solid Q3 earnings, boosting fellow neoclouds.
Data center operators have been among the most heavily beaten-down parts of the AI trade lately.
CoreWeave is trying to mount a comeback after weeks of stock losses driven by concerns about its debt and a broader panic in the AI trade.
Shares surged on Wednesday after the company reported earnings, lifting fellow neoclouds and the tech sector. Investors were piling back in after Tuesday’s sell-off sparked by a hot October inflation report .
The stock rose as much as 18% before paring shortly after the opening bell.
Other big moves among neoclouds on Wednesday include:
Nebius Group : +13%
Applied Digital : +7%
IREN Limited : +7%
The broader market rallied as tech mounted a comeback.
Here’s where major indexes stood shortly after the 9:30 a.m. opening bell:
S&P 500 : 7,584.86, up 0.85%
Dow Jones Industrial Average : 52,145.89, down 0.16% (-86 points)
Nasdaq 100 : 28,207.52, up 1.86%
CoreWeave’s revenue for the third quarter came in above Wall Street’s estimates, at $3.66 billion comapred to $3.55 billion expected, marking a 168% surge from the previous year. It also raised its guidance for the fiscal year to a range of $13 billion to $13.3 billion, up from $12 billion to $13 billion, signaling continued demand for compute at a time when investors have been fretting over a slowdown in the AI boom.
The spike on Wednesday is a stark departure from weeks of volatility that hammered CoreWeave’s stock since October. A panic about its bonds , which saw yields spike and prices drop into distressed territory, drove the stock down 20% in a week.
In its latest earnings report, CEO Michael Intrator said that the company’s cost of debt came down in the quarter.
“At the end of Q3, our weighted average cost of debt across our entire business was 7.9%, down 250 basis points year over year. Looking ahead, we will not use the unsecured debt market to fund our business at current yields. Nor do we need to.”
In a post on X , Eric Jackson, founder of EMJ Capital, flagged a bullish detail from the report related to CoreWeave’s sprawling GPU network.
“Management laid out a potential second economic life for its GPU fleet. 130,000 GPUs coming off contract in 2027,” he wrote. “Another 170,000 in 2028. And potentially ~$10 billion in annualized revenue from recontracting that capacity at today’s prices.”
That could address a key concern for investors, who have worried that GPU depreciation could be a major headwind for CoreWeave and other AI infrastructure firms. Vinny Daniel, cofounder of Seawolf Capital and an investor made famous by “The Big Short,” recently said this issue is a key reason behind his short bet against CoreWeave.
Despite the rally on Wednesday, there remains some lingering uncertainty around the trajectory for CoreWeave and the neoclouds. One major headwind on the horizon could be the elections, with the blue wave hinting at a slowdown in infrastructure development next year when Democrats take power in Congress next year.
Some have also raised concerns about heightened competition from the hyperscalers, which are building their own infrastructure and chips to use themselves and offer to AI customers.
“Our experts suggest that declining inference costs could drive even greater demand for computing capacity,” noted Garrett Waters, an analyst at market research firm Third Bridge. “That doesn’t necessarily mean CoreWeave will capture all of that growth, particularly as hyperscalers continue building out their own infrastructure and deploying custom AI accelerators in-house.
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