Jason's Chips
Buy-Side AI & Semiconductor Investor
CoreWeave's results show power and capacity are the binding constraint in AI cloud, with Blackwell and Vera Rubin pricing and margins setting new highs. Q2 revenue was $2.58B against $2.56B expected, adjusted EBITDA margin was 59%, and full-year 2026 revenue guidance moved to $12.4-13.2B. Backlog hit $104B, excluding more than $25B of early-Q3 commitments. Active power expanded to 1.5GW and contracted power to about 3.7GW. x.comÂ
CoreWeave's poor optics are exactly what give it high convexity. Because AI lets estimates get revised up 150% in a week, something unprofitable today could be trading at around 2x realized earnings. Its low margins, high debt and unprofitability are the attraction, a case few others are making. x.comÂ
Rising GPU rental rates and Anthropic's compute margins challenge claims of collapsing demand for CoreWeave's capacity. The WSJ reported Anthropic's first-half revenue of $16.3B against $9B in compute and infrastructure spending; Bloomberg reported its Q3 compute margin above 40%. Long contracts and fully amortizing loans cushion demand declines but cap upside. Despite the challenging neocloud model, CoreWeave's risk/reward is by far the best and its quality well ahead of peers. x.com x.com … Show more
CoreWeave looks positioned to be one of the biggest beneficiaries of years of demand for GPU computing at scale. It should be one of the most important players in the AI infrastructure buildout, with Jensen Huang and Nvidia deeply tied to it. At $50 a share, its debt load is not a concern; the stock could look like one of the best buying opportunities by decade-end. x.com x.comÂ
CoreWeave's financing looks more vulnerable amid a debt-market pullback for AI-data-center-dependent companies. Elon Musk says access has almost entirely shut off in recent weeks for firms without substantial revenue outside AI data centers, and expects few of the 200-plus neoclouds to survive consolidation. x.comÂ
CoreWeave's contract renting 2020-era Nvidia A100 capacity through 2029 undercuts the AI-bubble narrative pushed by critics such as Ed Zitron. As @Midnight_Captl notes, it extends the useful life of six-year-old chips to at least nine years. x.comÂ
CoreWeave's pricing power is overlooked amid financing fears, making it potentially the most misunderstood AI stock right now. It had over $104B in Q2 backlog and signed $25B in net new commitments over six weeks. Short-term contracts approach $40M per MW annually versus about $7M on active capacity, but that rate cannot be applied fleetwide. A $4.2B convertible carried a 2.875% coupon despite near-15% unsecured bond yields; $35B debt, dilution and capacity-conversion risks remain. x.comÂ
Hardware suppliers and VC keep financing cash-hungry labs and neoclouds, making compute rental prices at CoreWeave, Nebius and IREN look artificially supported. Lab revenue growth is finally plateauing at 800% year over year after roughly tenfold equity gains across the stack over the last decade. The buildout is also crowding out the economy's appetite for debt. x.com x.com x.com x.com x.com x.comÂ
CoreWeave's forward numbers look even stronger than its 112% revenue growth, as the AI infrastructure buildout keeps moving at an unbelievable pace. Q2 revenue hit $2.58 billion. Backlog stands at $104.2 billion, more than $25 billion of new customer commitments were added in Q3, Q3 revenue guidance is $3.45-3.60 billion, and full-year guidance was raised to $12.4-13.2 billion. x.comÂ
Contracted AI compute demand makes four AI infrastructure stocks worth buying at 52-week lows. Applied Digital has a $36B backlog and expects 600+ MW online within 12 months; Cipher Mining has $8.5B+ in AI leases with payments ramping; CleanSpark has a 20-year $6.6B lease and 1.8+ GW power portfolio; CoreWeave has a $104B backlog and raised its year-end ARR target to $18.5-19.5B. x.com x.comÂ
Global resistance to data centers could constrain December cloud growth despite the longer agentic AI buildout. Some estimates say roughly 120 US projects worth over $130B face delays; opposition spans the UK, EU, Australia and Malaysia too. Microsoft, Alphabet and Amazon remain favored, though guidance is at risk. CoreWeave, Nebius and IREN may bounce hardest short term but look weak longer term as funding tightens; Elon Musk expects extensive neo-cloud consolidation. x.com x.com x.com x.comÂ
Compute rental can produce operating profits, validating the neocloud case for CoreWeave, Nebius and Applied Digital. SPCX's reported data point counters last week's CoreWeave-Anthropic hit piece on AI demand. x.comÂ
