Nvidia (NVDA) CEO Jensen Huang on Thursday addressed the recent discord at key partner and darling of falling AI stocks CoreWeave (CRWV), expressing optimism about the data center operator after a 15% rout Wednesday and a smaller decline Thursday morning.
“The strength of CoreWeave is improving every day,” Huang explained at a Bloomberg event in Stockholm. “I’m optimistic. Their cost of capital is coming down.” His contribution was highly anticipated this week, as concerns about CoreWeave’s health and its exposures to Nvidia continued to grow.
Huang’s need to intervene came as no surprise to veteran tech analyst Tal Liani, who this morning issued a bullish rating on CoreWeave with an aggressive price target of $140. “Remember, Nvidia is basically funding all of these deals with them, with other hyperscalers, because they want to block competition. They want to make sure that CoreWeave and others are using Nvidia GPUs and not AMD GPUs,” Liani said on Sozzi Unleashed.
Liani added: “Ultimately, there is an inherent interest in both directions. And I’m sure you’re going to hear from everyone on the planet who has a vested interest in building data centers. You’re going to hear some comforting comments about the validity of the claim and the sustainability of the claim, including Jensen. It’s only a matter of time.
CoreWeave’s corporate bonds across all maturities continued to be abandoned due to fears of an AI slowdown and its implications for the company’s precarious balance sheet.
67.24 +1.46 (+2.22%)
At 2:29:46 p.m. EDT. Open market.
The selling spread to other AI cloud stocks: Nebius (NBIS) fell 11%, Oracle (ORCL) fell another 9%, and the following stocks sank more than 10%: DigitalOcean (DOCN), Hut 8 (HUT), Cipher (CIFR), TeraWulf (WULF), and IREN (IREN). Nvidia’s own shares fell 2% Thursday morning.
In January of this year, Nvidia announced the expansion of its relationship with CoreWeave. The deal called for Nvidia to invest $2 billion in CoreWeave stock. CoreWeave has committed to using Nvidia’s technology to build more than 5 gigawatts of AI factories by 2030.
Nvidia now owns 47.2 million CoreWeave shares, or about 10% of the company.
CoreWeave is also a big Nvidia customer.
CoreWeave buys GPUs from Nvidia and then leases them to other companies, including hyperscalers like Meta (META).
Brian Sozzi is the editor-in-chief of Yahoo Finance, host of the Sozzi unleashed the morning show and Power Actors with Brian Sozzi podcast and member of the Yahoo Finance editorial leadership team. Follow Sozzi on @BrianSozzi, InstagramAnd LinkedIn. Any advice on stories? Email brian.sozzi@yahoofinance.com.
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