Key Points
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CoreWeave’s third-quarter report beat Wall Street’s expectations, raised its guidance, and eased some of the market’s worries about AI debt.
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Sales jumped 168% to $3.66 billion, and the company said it would rely less on unsecured borrowing and more on sources like customer prepayments.
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Oracle has similar worries about its own debt, and I’m not convinced it’s out of the woods if the economics of AI shift.
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Oracle Corporation (NYSE:ORCL) stock is up 9.3% as of 2:20 p.m. ET on Wednesday, Nov. 11, after an AI cloud rival’s strong quarter eased some of the market’s worries.
The S&P 500 (SNPINDEX:^GSPC) and the Nasdaq Composite (NASDAQINDEX:^IXIC) are up 1.4% and 1.9%, respectively.
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CoreWeave earnings beat and raised guidance
CoreWeave (NASDAQ:CRWV) reported its Q3 numbers on Tuesday, Nov. 10, after the bell, revealing sales jumped 168% to $3.66 billion — better than what Wall Street was looking for. The company raised its guidance and said it had plenty of access to the funding it needs to grow.
The company said that it would pull back on unsecured borrowing and rely more on project-level financing and alternative sources like customer prepayments.
Oracle stock faces the same AI financing questions
Oracle stock has been trading under a similar cloud of worry surrounding its own use of debt. The company has jumped headfirst into AI data centers and has needed plenty of outside funding to build the capital-hungry facilities. CoreWeave’s positive quarter was taken as a sign of health for the whole industry.
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I’m still not convinced. If the economics of AI shift — and I think they will — Oracle could find itself in a precarious position, struggling to earn a return on its sizable investments.
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy.
