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Hyunsoo Rim

Google and Blackstone to create new AI cloud firm, sending neoclouds like Coreweave and Nebius lower

Alphabet’s Google and Blackstone are creating a new US-based AI cloud company, backed by an initial $5 billion equity investment from Blackstone, the asset manager announced Monday — sending shares of rival AI cloud providers CoreWeave and Nebius down nearly 4% in premarket trading Tuesday.

The venture will operate as a “compute-as-a-service” provider, giving companies access to AI computing capacity powered by Google’s Tensor Processing Units (TPUs), its own custom AI chips. The new company aims to bring 500 megawatts of data center capacity online in 2027, with “plans to scale significantly over time,” Blackstone said.

Blackstone is expected to be the majority owner, and the total ​investment could rise to $25 billion after adding debt, according to Bloomberg. Google will supply the hardware — including TPUs — as well as software and services. The new company will be led by longtime Google executive, Benjamin Treynor Sloss.

The deal comes as demand for AI computing capacity surges, with companies racing to secure the chips, data centers and power needed to train and run AI models — Google employees themselves now have to compete with Anthropic and Meta for access to Google compute.

The venture also marks Google’s most direct push yet to commercialize its in-house AI chips, challenging Nvidia’s GPUs that powered much of the earliest AI boom.

Shares of Nvidia-backed AI cloud providers CoreWeave and Nebius fell on the news, while Alphabet was up slightly.

Blackstone Announces Joint Venture with Google to Create New TPU Cloud - Blackstone

Blackstone Announces Joint Venture with Google to Create New TPU Cloud - Blackstone

The venture will operate as a “compute-as-a-service” provider, giving companies access to AI computing capacity powered by Google’s Tensor Processing Units (TPUs), its own custom AI chips. The new company aims to bring 500 megawatts of data center capacity online in 2027, with “plans to scale significantly over time,” Blackstone said.

Blackstone is expected to be the majority owner, and the total ​investment could rise to $25 billion after adding debt, according to Bloomberg. Google will supply the hardware — including TPUs — as well as software and services. The new company will be led by longtime Google executive, Benjamin Treynor Sloss.

The deal comes as demand for AI computing capacity surges, with companies racing to secure the chips, data centers and power needed to train and run AI models — Google employees themselves now have to compete with Anthropic and Meta for access to Google compute.

The venture also marks Google’s most direct push yet to commercialize its in-house AI chips, challenging Nvidia’s GPUs that powered much of the earliest AI boom.

Shares of Nvidia-backed AI cloud providers CoreWeave and Nebius fell on the news, while Alphabet was up slightly.

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Helena Cheng

Home Depot reports Q1 earnings beat, full-year guidance reaffirmed

Home Depot reported Q1 earnings results with sales up 4.8% from a year earlier, beating Wall Street estimates.

Key numbers:

  • Revenue: $41.77 billion (estimate: $41.50 billion)

  • Adjusted EPS: $3.43 (estimate: $3.42)

  • Comparable Store Sales: 0.6% (estimate: 0.9%)

Comparable sales came in below forecasts while the company reaffirmed its full-year guidance, expecting annual sales to grow between 2.5% and 4.5%.

“Our first quarter results were in line with our expectations,” said Ted Decker, chair, president and CEO. “The underlying demand in our business was relatively similar to what we saw throughout fiscal 2025, despite greater consumer uncertainty and housing affordability pressure.”

While the company has served neighborhood handymen for decades, its recent growth is also partially charged by the finalized acquisition of Mingledorff’s, a premier wholesale HVAC distributor operating 42 commercial locations across the southeastern United States. Home Depot said the transaction gave it access to high-volume commercial mechanics and residential trade contractors, expanding its total addressable market to $1.2 trillion.

The company is also using machine learning to automate parts of commercial building work that have traditionally been manual. One example is its Material List Builder AI, which lets contractors upload architectural blueprints or dictate voice notes from a jobsite to generate materials lists.

Investors are continuing to track whether strategic pricing changes and distribution scale can help the business maintain its full-year gross margin target of 33.1%.

markets
Claire Yubin Oh

ServiceNow rises after Bank of America analysts reinstate as a Buy with a $130 price target

ServiceNow is up 4% in early trading on Tuesday, after Bank of America analysts reinstated coverage of the stock with a buy rating and a $130 price objective.

Now seeing the company as an “AI beneficiary given its entrenched workflow position,” Bank of America analysts, led by Tal Liani, wrote that “AI increases the need for governance, positioning ServiceNow at the center of workflow orchestration and control.” Replacing NOW with new AI tools, which has been the primary concern for many investors who have dumped the stock this year (the company's earnings being the latest example), will be “costly and complex,” considering the company’s “deeply embedded mission-critical position” within existing enterprise workflows, according to BofA's analysts.

The threat of AI agents, which can autonomously do tasks once set up, might actually lead to more demand for ServiceNow's products, with Liani writing that agentic AI deployments "would elevate the need for orchestration, permissions, approvals, policy enforcement and auditability, aligning directly with ServiceNow's core capabilities and making it the orchestration layer in an AI-driven cycle".

The team also highlighted how ServiceNow’s recent initiatives would benefit from AI, rather than being threatened:

“[W]e see the company capturing incremental value as AI adoption scales: AI Control Tower defines the strategic role; Action Fabric provides the connective layer into workflows; hybrid pricing creates the monetization model; and the Armis/Veza acquisitions strengthen the security and identity context.”

That’s a much-needed vote of confidence for NOW, which has seen its shares drop more than 40% in 2026 until the past week’s uptick. Other software peers like Workday, Atlassian, HubSpot, and Intuit are also in the green before the bell on Tuesday.

Tasha Matsumoto
17h
Tech drags down stocks as semiconductors slip

Stocks fell as memory and semiconductor shares declined, along with five of the Magnificent 7 names.

Bears awaken from hibernation at the zoo in Thale
markets
Luke Kawa

Memory stocks tumble after Seagate warns on difficulty of meeting demand, bond yields edge higher

Memory stocks are cratering on Monday after media reports indicating that Seagate Technology Holdings CEO Dave Mosley warned that it would “just take too long” to boost capacity to meet AI-fueled demand.

Micron, Sandisk, and Western Digital are down in addition to Seagate.

Another place to look to help explain the group’s sudden travails (lumping together flash, storage, and high-bandwidth): memory stocks have displayed an elevated level of momentum, and momentum stocks have generally come under acute pressure during sudden bond market sell-offs.

Mosley’s answer, delivered at a JPMorgan conference, is worth reading in full, as the summarized media reports miss some of the nuance (emphasis added):

“What our customers are driving us for right now is more exabytes. And we believe that the way to get the most exabytes is to take our talented teams and really go through these technology transitions. We're targeting mid-20s percent growth, which is enormous CAGR. And the only way we're going to get there is to be able to go through those technology transitions, if you will, to take a 3 terabyte per platter product to a 4 terabyte per platter to a 5 terabyte per platter year over year over year. And so that's really the way we're driving it. If we took the teams off and started building new factories or bringing up new machines, it would just take too long. You would end up more capacity, if you will, but then you'd slow the rate of growth on that technology. So back to your question directly, the wildcard really is in unit capacity for disk drives, which we again could be fairly flexible with once we package those heads and media. That gets down to more customer diversification and edge and edge AI and all those use cases, which I think could come someday. So we would take the heads and media that we have planned and divert them somewhere else should those applications take hold.

To grossly oversimplify Mosley’s answer, he’s saying that in a resource-constrained environment, technology improvements are the better way to meet demand than building out more capacity.

Reasonable folks can quibble about how negative these remarks really are for the industry.

On one hand, not getting over their skis on capex is something that, all else equal, would protect profitability over time and avoid the boom-bust cycles that have plagued the industry.

On the other hand, that gives more time for competitors (especially those from China) to try to step in and meet the market’s appetite for memory. To that end, Changxin Memory Technologies is posting massive growth as it readies for an IPO.

markets
Paige Oamek

Lumentum, Coherent fall after hedge fund manager Aschenbrenner dumps his holdings

Shares of Lumentum and Coherent plunged Monday after Leopold Aschenbrenner, ex-OpenAI researcher turned investor, disclosed his Situational Awareness fund exited its holdings in those companies during the first quarter.

By the afternoon, Lumentum was down 11% and Coherent was down over 6%. The losses are relatively small compared to the over 120% and 80% gains the AI infrastructure companies had put up, respectively, since January.

The two companies are developers of phonetics and optical equipment, which help data centers and AI hyperscalers transmit data.

Aschenbrenner’s firm, Situational Awareness, is making major market ripples today, also sending shares of T1 Energy soaring on news he bought the stock.

He also made a bearish bet against Nvidia, which recently invested $4 billion ($2 billion each) into Lumentum and Coherent.

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