CoreWeave soars as a supply-constrained Nvidia may be more good news than bad

CoreWeave is surging in early trading on Thursday, up 6.3% as of 10:00 a.m. ET. That’s despite Nvidia, one of its biggest investors and a close partner to the recently IPO’d cloud computing company, being modestly lower after reporting solid but lackluster Q2 earnings yesterday.

Quick caveat: CoreWeave has gained or lost at least 5% in more than half of the trading days in its short history as a publicly traded company. The stock can go up or down a lot based on news or shifting sentiment and waves of activity. Trading volumes and call activity in CoreWeave have been strong out of the gate this morning, and the stock may be merely overcoming the near-term headwinds associated with the end of its post-IPO lockup expiry.

That being said, let’s stipulate the following (seeming) facts:

• Demand for AI compute is immense, and currently outstrips available supply.

• Nvidia’s slight miss on Q2 data center revenues is primarily a supply constraints story.

• CoreWeave effectively provides overflow access to Nvidia’s GPUs.

• CoreWeave has preferential access to Nvidia’s GPUs.

Putting that together... you don’t have to squint too hard to see Nvidia’s quarterly earnings as a positive for the AI cloud computing company!

Imagine your Uber driver operating during a rainstorm after Super Bowl Sunday — that’s close to the position CoreWeave finds itself in.