CoreWeave Inc (Derivatives) (CRWV)

$CRWV is almost back at support

Price sold off with the rest of the AI infrastructure sector and is now sitting near a key level

So far, price has bounced with strength after reaching the level

From a fundamental perspective $CRWV is an interesting debate:
• Trading at 2.03-2.14x market cap / ARR
• Interest on debt is 25% of revenue

This gives extreme bull and bear cases which loads the spring to both sides depending on execution

What side are you on?

Both $CRWV and $NBIS held up strong yesterday, despite a bad day across the board.

What does this mean?

The market is about to process that the rise of cheaper models, open or closed, is bad for the frontier labs, but good for every other company in the ecosystem.

Chinese labs are compute constrained and, even if they weren’t, Western enterprises would be highly skeptical using Chinese models hosted in Chinese servers.

Instead, they are hosted in major American cloud providers, and enterprises can confidently use them. This shifts both demand and margins to hyperscalers.

To cover the demand, they’ll keep buying more compute from neoclouds.

This circle of demand will of course keep feeding semiconductors upstream.

Still, I wouldn’t touch most of the semiconductors here as they are already overvalued except $NVDA, but it’s definitely the time to long hyperscalers and neoclouds.

$MSFT $GOOG $AMZN $NBIS $CRWV