CoreWeave, Super Micro climb on signs of sustained AI buildout

On August 12, shares of AI infrastructure companies CoreWeave and Super Micro Computer surged to their highest levels since June, following optimistic forecasts that highlighted increasing demand for computing capacity. Both firms, critical beneficiaries of the burgeoning AI sector, capitalized on the escalating need for data center infrastructure supporting generative AI workloads.

CoreWeave's shares surged more than 19%, outperforming peer Nebius Group, which also rose 23% after surpassing revenue expectations. Super Micro's stock climbed over 13%, while other data center companies such as Applied Digital and IREN Ltd experienced gains of 4% and 8%, respectively, while Dell rose 5%. If this upward trend persists, CoreWeave's market value could expand by approximately $8 billion, and Super Micro's by over $2 billion.

More than seven brokerage firms revised their price targets upward for both companies. CoreWeave recently raised its annual revenue, adjusted operating profit, and capital spending forecasts amidst robust demand for its Nvidia-powered AI infrastructure, allowing it to negotiate better terms in new contracts. CEO Michael Intrator noted that near-term capacity is largely sold out, enabling CoreWeave to secure compute agreements at increasingly favorable rates.

The company's revenue backlog in the second quarter stood at $104.2 billion, an increase from $99.4 billion in the previous quarter, excluding over $25 billion in new commitments secured early in the period. Some investors may be wary of the increased capital expenditure guidance, but the pricing environment suggests that project returns are strengthening, despite rising unit costs.

MoffettNathanson analysts emphasized that while capital expenditure is rising, it is driven by tech companies' efforts to fuel the AI boom, leading to substantial debt accumulation among hyperscalers. This has spurred a rise in hedging strategies against default risk. Notably, Super Micro forecasted 2027 revenue exceeding Wall Street estimates, demonstrating resilient customer investment in AI servers.

The company's fourth-quarter gross margin of 17.5% surpassed both its preliminary estimate of 15-17% and initial forecast of 8.2-8.4%. As major U.S. financial institutions, including Bank of America and Morgan Stanley, pledge significant funding for U.S. infrastructure development, the AI infrastructure buildout continues to attract investment.