US stocks closed higher on Wednesday, led by a sharp recovery in technology shares as CoreWeave reported third-quarter results that eased investor anxiety over artificial intelligence financing.
The Nasdaq Composite jumped 1.60% to close at 25,466.19. The S&P 500 advanced 1.31% to 7,619.38. The Dow Jones Industrial Average gained 254.60 points, or 0.49%, ending the session at 52,486.49, according to data cited by CNBC.
Neocloud firm CoreWeave saw its shares surge 24.7%, as reported by Yahoo Finance. Reporting was handled by Chuck Mikolajczak, with additional reporting provided by Niket Nishant, Utkarsh Hathi, and Tharuniyaa Lakshmi in Bengaluru, and editing managed by Shinjini Ganguli, Pooja Desai, and David Gregorio.
BREAKING: CoreWeave stock, $CRWV, surges over +16% after posting stronger than expected earnings due to AI. Nasdaq 100 futures extend gains to +1.5% on the day. pic.twitter.com/3JwUmWRssb
As trading got underway, the Nasdaq Composite rose 385.17p (1.54%) to 25,451.05. The S&P 500 added 73.02p (0.97%) to reach 7,593.95. The Dow Jones Industrial Average ticked up 27.13p, or 0.05%, bringing it to 52,259.02.
The performance helped stabilize the technology sector. Nvidia climbed 2.9% after dropping nearly 10% to start the week when Jensen Huang confirmed he had an affair with an alleged Chinese spy. Energy names also saw upward momentum, with BP gaining 2.95% to 568.5p and Ithaca Energy rising 2.23% to 256.2p.
CoreWeave ($CRWV) says qualified AI demand is 10x its available capacity through 2027. CEO Michael Intrator says the company is holding back future capacity as pricing keeps rising.https://t.co/UI1mu1S6jd
The sentiment bump coming from CoreWeave results and Anthropic IPO demand is helping the broader ecosystem.
Ross Mayfield, Baird Private Wealth Management
“Markets are continuing to unwind last week's overshoot to the downside with cleaner positioning now a tailwind and an attractive near-term valuation/earnings story in a lot of the AI stocks,” Ross Mayfield, an investment strategist at Baird Private Wealth Management, told CNBC.
Despite the revenue beat, CoreWeave reported a net loss of $709 million for the third quarter. Net interest expense reached $846 million as the company carries about $47 billion in debt. Management outlined new financing approaches during the earnings call.
Over the upcoming three-month period, CoreWeave anticipates gathering about $9 billion through customer deposits and prepayments. That figure incorporates upwards of $3 billion stemming from fresh agreements for infrastructure already completed. Chief Executive Officer Michael Intrator pointed to adjustments in how the company contracts capacity to manage capital needs.
We are also allocating more capacity to short-term opportunities, where the pricing justifies it, selling capacity at more than $40 million per megawatt annually, while pricing for new infrastructure on four and five-year contracts is moving to $20 million to $25 million per megawatt.
Michael Intrator, CoreWeave
“We will not use the unsecured debt market to fund our business at current yields, nor do we need to,” CoreWeave CEO Michael Intrator said. CoreWeave raised the lower end of its annual capital expenditure outlook to a range of $37 billion to $39 billion.
The company lifted full-year revenue guidance to between $13 billion and $13.3 billion, backed by an ending contract backlog of $132.5 billion. Visible Alpha had estimated adjusted operating income at $1.07 billion, but CoreWeave updated projections to a range between $1.275 billion and $1.375 billion.
Macroeconomic pressures persisted following inflation data released earlier in the week. The consumer price index increased 0.4% month-over-month in October, exceeding economists’ estimates and triggering a sell-off in equities on Tuesday.
“It's another distressing report — borderline disturbing,” Chicago Federal Reserve President Austan Goolsbee said in an interview with PBS NewsHour.
Earlier coverage: S&P 500 Futures Rise as Traders Await Consumer Inflation Report
