Tech Stocks Add Over $500 Billion as CoreWeave's Blockbuster Results Rescue AI Rally

Investors spent the past month treating CoreWeave as the weakest link in the artificial-intelligence trade. On Wednesday, the neocloud became the reason the trade came back to life.

CoreWeave Inc. (NASDAQ:CRWV) jumped 20.8% to $58.85 in morning trading Wednesday, after third-quarter results showed margins improving faster than planned and a funding plan that leans far less on Wall Street than investors had feared.

The relief spread fast.

Twenty-two AI-linked stocks, from chipmakers and memory producers to networking, servers and power suppliers, added more than $500 billion in combined market value by 9:52 a.m. ET.

As of 10:35 a.m. ET, Nvidia Corp. (NASDAQ:NVDA) had added about $95 billion, rising 2.3%. Broadcom Inc. (NASDAQ:AVGO) climbed 5.5%, adding about $86 billion, while Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) rose 3.3%.

The Invesco QQQ Trust (NASDAQ:QQQ) rose 1.7%, about double the 0.8% gain in the SPDR S&P 500 ETF Trust (NYSE:SPY).

The Technology Select Sector SPDR Fund (NYSE:XLK) gained 2.7%, while the VanEck Semiconductor ETF (NASDAQ:SMH) added 3.8%.

Why the CoreWeave Print Mattered for the Whole AI Trade

The fear heading into the report was not about demand. It was about money.

After the recent selloff in credit, investors worried that CoreWeave would need to keep tapping bond and equity markets at punishing costs to fund its data-center buildout.

Management answered that directly.

The company said it does not plan to issue parent-level unsecured debt through 2027 at current yields. Instead, it expects to finance most of its remaining capex with delayed-draw term loans matched to customer contracts.

In addition, the company expects about $9 billion in customer prepayments and deposits over the next three months, including more than $3 billion tied to re-contracting existing capacity at premium prices.

As a result, CoreWeave sees less than $5 billion of parent-level capital needed through 2027 to deliver its existing backlog.

"Much more modest than investor perception heading into the print," JPMorgan analyst Samik Chatterjee said in a note Wednesday.

Margins Arrived a Quarter Early

Third-quarter revenue reached $3.66 billion, up 168% from a year earlier and ahead of the $3.54 billion consensus, according to JPMorgan.

Pro forma operating margin hit 10.4%, well above the roughly 6.8% Wall Street expected. Chatterjee said the company reached low double-digit margins a quarter ahead of plan, and it guided to around 16% in the fourth quarter.

Pricing is doing the heavy lifting.

According to JPMorgan, prices rose about 25% across products in July, followed by another 10% later in the quarter, and kept climbing in the fourth quarter.

Older chips are earning more, too. Contract renewals for Nvidia’s Ampere and Hopper graphics processors were priced 30% to 50% higher than in the prior quarter, above the original contract terms.

Meanwhile, revenue backlog climbed to $132.5 billion, up 138% year over year. CoreWeave raised its full-year revenue outlook to $13 billion to $13.3 billion and lifted its exit annual recurring revenue target to $20 billion to $21 billion.

JPMorgan reiterated its Overweight rating and $125 price target, implying about 112% upside from Wednesday’s price.

From Chips to Memory to Power

The rally was broad across the AI supply chain.

Memory stocks led.

Micron Technology Inc. (NASDAQ:MU) rose 10%, adding about $82 billion, while SK Hynix (NASDAQ:SKHY) gained 8.7%. SanDisk Corp. (NASDAQ:SNDK) jumped 13.2%.

Oracle Corp. (NYSE:ORCL), another heavily debt-funded AI cloud builder, climbed 6.6%. Dell Technologies Inc. (NYSE:DELL) rose 10.2%, and Bloom Energy Corp. (NYSE:BE) gained 13.6% as power names joined in.

Rival neocloud Nebius Group N.V. (NASDAQ:NBIS) rose 14.8%.

Not Everyone Is Convinced

The bounce comes from a deep hole. CoreWeave shares are still down nearly 30% over the past month and about 18% since the start of the year.

Even some bulls trimmed expectations. Truist Securities kept a Buy rating but cut its price target to $115 from $165, while Evercore ISI maintained Outperform and lowered its target to $100 from $150.

Capex also ran hot. CoreWeave spent $14.5 billion in the quarter, above its $11.5 billion to $13.5 billion guidance, and free cash flow is expected to lag pro forma net income, which turns positive in fiscal 2028, according to JPMorgan.

Wednesday showed how much of the AI trade rests on one question: who pays for the buildout.

For one morning, CoreWeave had an answer.

CRWV Price Action: CoreWeave shares were up 20.77% at $58.85 at the time of publication Wednesday, according to Benzinga Pro data.

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