Why CoreWeave Stock Popped Today
Key Points
CoreWeave management rebutted concerns about the useful life of its GPUs on a podcast.
The gains lifted peer stocks as well.
Volatility in the neocloud stock is likely to continue through this year.
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Shares of CoreWeave (NASDAQ: CRWV) were moving higher today after investors responded favorably to comments from management on a recent podcast about the useful life of GPUs in its data centers.
As a result, CoreWeave stock was up 11.9% as of 12:08 p.m. ET.
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The GPU depreciation debate continues
Concerns about depreciation in GPUs had been a major reason for the stock's pullback in the second half of last year, but CEO Michael Intratoe and Chief Strategy Officer Brian Venturo rebutted those arguments recently on the Big Technology podcast, and investors seem convinced by their argument.
The momentum was strong enough to lift stocks of peers like Nebius and Oracle higher today as well.
It wasn't immediately clear what the comments were, but CoreWeave has been highly volatile since its debut close to a year ago due to the risky, but high-growth nature of its business model.
As a neocloud company, it essentially purchases GPUs and rents out computing power in its data center for AI models that run on such hardware.
CoreWeave is delivering triple-digit growth, but the company is also losing money and spending a ton on capital expenditures.
What's next for CoreWeave
Investors should expect another volatile year from CoreWeave as it's still unclear where the neocloud sector is headed and if the company can turn a profit eventually.
CoreWeave hasn't announced a fourth-quarter earnings date, but the report should come at some point in February. Analysts are expecting revenue of $1.54 billion and a loss per share of $0.67.
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Jeremy Bowman has positions in CoreWeave. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.
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