Key Takeaways
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CoreWeave jumped 5% today as AI stocks rebounded, and Nebius rose on no news of its own.
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CoreWeave’s Wayve deal came with no dollar value, so the move is about AI sentiment.
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CoreWeave guided to up to $940 million of third-quarter interest expense, against at most $260 million of adjusted operating income.
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Tuesday’s report also matters for IREN, which funds part of its build with customer prepayments.
CoreWeave (CRWV:NASDAQ) jumped 5% today as AI stocks bounced back from last week’s selloff, and Nebius (NBIS:NASDAQ) rose 7% with no company news at all.
Both report this week, and both trade, like IREN (IREN:NASDAQ), on what it costs to borrow for the AI buildout.
A bounce with little news behind it
The Nasdaq 100 ETF rose 3%. CoreWeave’s multi-year deal to train self-driving company Wayve’s models came with no dollar value attached. With Nebius matching the move on no news, I’d credit the sector.
Plenty of growth, at a steep discount
NYU Stern professor Scott Galloway put it bluntly on Monday’s Prof G Markets: “the neocloud guys or the compute guys, they’re basically levered trades to AI.”
Analysts expect CoreWeave’s revenue to more than double this year, to $12.9 billion, and reach $43.7 billion by 2028:
Yet the stock traded at 1.3x forward sales at Friday’s close, against a 3.5x average over the past year:
(At today’s price, it’s only a touch higher.)
That’s the debt. Total debt, leases included, climbed to $51.6 billion at June 30 from $6.28 billion in September 2024:
Management guided to $860 million to $940 million of third-quarter interest expense, against $200 million to $260 million of adjusted operating income.
TIKR tracks 42 analysts on CoreWeave. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on CoreWeave, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See CoreWeave’s Analyst Ratings
Tuesday is the real test
Nebius, which reports Thursday, hit the same wall, passing on a high-yield bond for a $3.5 billion senior secured credit facility from Citigroup. IREN went around it, signing a five-year contract after its Sept. 30 quarter in which the customer prepays 90% of the GPU capex. Can CoreWeave get its customers to fund more of its build that way?
Applied Digital (APLD:NASDAQ), up 4% today, is CoreWeave’s landlord in North Dakota. In October, it signed a memorandum of understanding to assign one building’s lease to a CoreWeave subsidiary if that subsidiary wins an investment-grade rating.
