"Shares are jumping 5% in morning trading today, approaching $120 per share, fueled by blockbuster news of a $6.3 billion deal with Nvidia ( NASDAQ:NVDA ). The agreement, signed under their existing master services pact, commits the chip giant to snapping up any unsold cloud capacity from CoreWeave through April 2032. This backstop ensures steady revenue amid soaring AI demand, highlighting CoreWeave's pivotal role in powering next-gen computing."
"Jim Chanos, the legendary short-seller famed for torching Enron, took to X in August to blast CoreWeave for purportedly wildly overestimating the useful lives of its Nvidia GPUs. Chanos, who runs Kynikos Associates, warned that accelerated depreciation could gut profitability. "CoreWeave's accounting smells like dot-com era overoptimism," he posted, echoing fears of an AI bubble. His commentary amplified bearish sentiment, which helped contribute to the stock's August pullback as investors fretted over hidden costs in the GPU-heavy business."
CoreWeave secured a $6.3 billion agreement with Nvidia that requires Nvidia to purchase any unsold cloud capacity from CoreWeave through April 2032. The pact provides a revenue backstop amid accelerating AI demand and reinforces CoreWeave's role in AI infrastructure. Shares rose about 5% to near $120, marking a 42% rebound from an August low around $84. CoreWeave went public in March with a valuation above $35 billion and reported first-quarter revenue up 420% year-over-year to $981.6 million. Nvidia holds 24.3 million CoreWeave shares, and CoreWeave also has large deals with OpenAI and Microsoft. Short-seller concerns about GPU depreciation created volatility prior to the deal.
Read at 24/7 Wall St.
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