Markets
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Luke Kawa

Nvidia’s CoreWeave position alone would be one of the most profitable US companies

It was a little curious when Nvidia took an anchor position in CoreWeave’s IPO. The move had a bit of an ouroboros feel to it — the dominant industry player supporting an upstart whose business model has been dependent on access to the chip designer’s powerful products.

And well, if Jensen Huang ever gets bored of running a $3 trillion company, there just might be a place for him in the hedge fund world.

Over the course of this quarter (which is only about two-thirds complete), the value of Nvidia’s CoreWeave position has increased by about $3.1 billion, assuming it hasn’t sold any.

That’s about $900 million in value at the end of Q1 (24,182,460 shares at a price of $37.08) turning into nearly $4 billion as of this afternoon.

For perspective, that gain is more in net income than 473 companies in the S&P 500 generated last quarter, ahead of Pfizer and right behind Disney on the leaderboard.

I guess forgoing $8 billion in H20 sales to China this quarter stings a little less now that nearly 40% of that has been offset (so to speak) by CoreWeave’s rally, in which the recently IPO’d company has been a retail darling thanks to its huge backlog and exposure to the AI boom.

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Luke Kawa

Oracle’s underwhelming results are kneecapping the AI trade

The nasty reception to Oracle’s quarterly results, which included a small revenue miss along with much more capex and cash burn than analysts had anticipated, is cascading through the rest of the AI trade.

Among the names getting hit hard:

While stocks have recovered strongly since their November 20 intermediate low, that’s been more about bullishness on Google and its partners as well as global growth than the AI trade broadly.

Only one member of the VanEck Semiconductor ETF is negative during this time: Nvidia. The second-worst performer of the bunch over this stretch is AMD, another AI GPU provider.

markets
J. Edward Moreno

PetMed soars after disclosing $4-per-share buyout offer from investment firm

PetMed Express soared after disclosing that it had received a take-private buyout offer from Singapore investment firm SilverCape Investments, valuing the company at a significant premium.

SilverCape would pay $4 per share, a 125% premium from the $1.77 the stock closed at on Wednesday. Shares soared 50% in early trading to $2.65.

PetMed said its board would evaluate the offer.

The company, which has been public sine 1997, has reported stagnating sales and slipped into unprofitability in 2024. The online pet pharmacy is down 60% this year and down 96% since its peak in 2018.

Max Knoblauch
1h
Disney invests $1 billion in OpenAI in deal that brings its characters to AI video platform Sora

Disney and OpenAI announced a major partnership on Thursday.

Walt Disney World
Luke Kawa
3h
Oracle’s conference call exacerbated the two biggest reasons why investors are worried about its future

Shares are off double digits in early trading as capex is going up, debt is going up, and turning Oracle’s sales backlog into high-margin business is off to a slow start.

Screaming Man
markets
Jon Keegan & David Crowther

Oracle sinks as cloud division misses and company plans $15 billion more capex

Shares of Oracle fell in after-hours trading Wednesday — and remained under pressure in the premarket session Thursday morning, down more than 11% as of 5:20 a.m. ET — after a headline beat on earnings was overshadowed by softer revenue.

Adjusted earnings per share were $2.26, up 54% year on year, blowing past analyst expectations of $1.64 per share. However, this beat was primarily due to the disposal of its Ampere chip company to SoftBank, which boosted pretax earnings by $0.91 per diluted share, Barron’s reported.

Revenue for the quarter was $16.06 billion, up 14% year on year but missing estimates of $16.2 billion.

The big weakness weighing most heavily on the stock this morning seems to be Oracle’s cloud computing unit, where sales came in at $8 billion for the quarter, up 34% year on year. Analysts had been expecting $8.8 billion.

The other major talking point heading into the print — how much Oracle was investing in capex for new data centers — has proven to be another sticking point again. On the earnings call, Doug Kehring, the company’s principal financial officer, said:

“...given the added RPO this quarter that can be monetized quickly starting next year, we now expect fiscal 2026 CapEx will be about $15 billion higher than we forecasted after Q1.”

That will do little to alleviate concerns around Oracle’s diverging free cash flow and net income, though the company’s execs did also say that they expect total cloud revenue to grow 40% to 44% in the coming quarter. Leadership also said they believe they can convert some of the added backlog to revenue sooner than expected, adding $4 billion of “additional revenue in FY27.”

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