From Yahoo Finance: 2025-05-17 09:00:00

Nvidia-backed AI cloud company CoreWeave’s stock has surged over 100% since its IPO in March, outperforming the S&P 500’s 7% gain. CoreWeave rents data center capacity to Big Tech firms like Microsoft and Meta, fueling their AI ambitions. Nvidia holds a 7% stake in CoreWeave and sells chips to the company. CoreWeave reported strong quarterly earnings and a bullish revenue outlook, but its stock dropped due to higher capital expenditure projections. Analysts have mixed views on CoreWeave, with some citing concerns about its debt structure and reliance on a few customers like Microsoft. OpenAI’s massive commitments to CoreWeave have raised questions about sustainability and profitability in the AI market. Big Tech companies are considering reducing their cloud capacity, which could impact companies like CoreWeave who provide extra capacity to businesses on top of their own data centers. This shift could lead to a decrease in demand for additional cloud services.

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Read more at Yahoo Finance: Nvidia-backed CoreWeave soars 100% since IPO as investors see AI demand outweighing ‘risky’ business model