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A Word On CoreWeave…
If you're not familiar with CoreWeave by now, you need to remedy that situation posthaste, because t
So either CoreWeave is receiving excess hyper-scale demand (short-term) or the hyper-scalers are hedging hardware ownership (long-term), or maybe both?
Is CoreWeave an intermediary way to obtain the power necessary to run a data center?
If so, commodity traders should be really, really good at this; except that states are waking up to the massive power usage necessary to run data centers and the resulting impact on residentsā power bills. This is causing state legislators to propose legislation to both attract data centers and simultaneously protect residential electricity rates. This is an unknown impact.
https://wisconsinexaminer.com/2025/11/06/democratic-lawmakers-propose-policy-framework-for-wisconsin-data-center-construction/
Finally, the $45B market cap with a 14% short against the float scares me. I have been investing in a stock over the last 13 years with a ārelatively smallā market cap and a large short position, but I have figured out how to do thatā¦ with that specific company (very profitable and solid growth- even if not on a straight line) by just holding when I am wrong about a specific quarter, because (at least so far) I am still right in the long term. Can be pretty volatile based on āthe shortsā rocking the boat.
I am intrigued, however, because my favorite time to buy a stock is after a severe overreaction to moderately bad news.
Coreweave reminds me of the pandemic glory days of Fastly (edge computing and CDNs) which still barely makes a profit.
Coreweave works until excess demand disappears or a haircut such as H mentions happens. . .then poof! Commodity traders usually exit trades profitably when momentum turns negative, or the leverage blows them up. Which will happen, who knows but popcorn please.
tech getting cheaper and smaller generally holds true, except for my cable/internet/streaming bill which is getting more expansive and expensive!!
According to a Reuters story on Sept 15 CoreWeave signed a $6.3 billion initial order with backer Nvidia in a deal that guarantees that the AI chipmaker will purchase any cloud capacity not sold to customers…which in theory cushions it against any potential decline in demand for AI computing capacity…circular deals which suggest a potential house of cards collapse when demand slacks off…not just for CoreWeave but potentially for NVDA as well.
Are you THE Marc Chaikin? š
I suspect such “delays” will be much more commonplace as the Great AI Build Out continues apace.
From an article that @derek pointed out:
“bonds issued by so-called hyperscalers ā companies that are building vast data centres, including Alphabet, Meta, Microsoft and Oracle ā has sustained a hit . . . The spread . . . over Treasuries, has climbed to 0.78 percentage points . . . up from 0.5 points”
Middlemen like CRWV and OWL allow hyperscalers to keep data center investment off their own balance sheets, and keep their own cost of capital low.