CoreWeave (CRWV +21.51%) stock was up 23.5% as of 3:15 p.m. ET Thursday. The S&P 500 and the Nasdaq Composite were up 1.8% and 3%, respectively.
CoreWeave, the fast-growing neocloud, is seeing shares rise alongside the entire market. After a brutal sell-off at the end of trading yesterday, the tech market is recovering behind a strong earnings report from the tech behemoth Microsoft. Its report, alongside Meta's, showed demand for AI compute is still while-hot.
NASDAQ: CRWV
Key Data Points
Microsoft and Meta show AI compute demand is still white-hot
Microsoft said its cloud platform Azure grew by a whopping 43% year over year behind continued AI demand. The company is scaling rapidly and relying heavily on leasing, signing more than $130 billion in new data center leases during the quarter. That's a jump of over two-thirds from the previous quarter.
CEO Satya Nadella said the company is on pace to roughly double its data center capacity within two years.
Image source: Getty Images
Although Meta's quarter largely disappointed investors, comments on the earnings call made it clear that the company also sees massive continued demand in AI compute.
Why I'm avoiding CoreWeave despite the good news
The news that Microsoft and Meta still see so much demand and are leasing from third parties in part to meet it is great news for neoclouds like CoreWeave, which has deals with both tech giants.
Still, CoreWeave stock, even after falling heavily this year, is overvalued in my view. I would avoid the stock.
