Economic Observer reporter Zheng Chenye

Just a week ago, many people in the market believed that this round of AI driven stock market trends had come to an end.

From recent market performance, the global AI computing power industry chain has been continuously bearish: the Nasdaq index fell 5.3% in October, and fell another 5.52% in a single day on November 5th, marking the largest single day decline since April 2025; The next day, the South Korean stock market triggered a circuit breaker during intraday trading; On the A-share market, the stock price of optical module company Zhongji Xuchuang (300308. SZ) closed at 448 yuan on November 6th, down more than 67% from its annual high in June.

After the US stock market closed on November 10th Eastern Time, CoreWeave (CRWV. O), a US computing leasing company, released its third quarter financial report for 2026. According to the financial report, CoreWeave achieved a revenue of $3.66 billion in the quarter, a year-on-year increase of 168%, and raised its full year revenue guidance.

CoreWeave has received multiple investments from Nvidia (NVDA. O) and is known as the "son of Nvidia" in the market. In the recent round of stock market decline, it is one of the most impacted companies, with its stock price dropping by over 40% in the month leading up to the release of its financial report.

After CoreWeave's financial report was released, global AI computing stocks rebounded. On November 11th, A-shares Zhongji Xuchuang and Xinyisheng (300502. SZ) rose 15.07% and 16.97% respectively, both achieving their largest daily gains of the year; South Korea and Taiwan, China rose 2.6% and 3.6% respectively. After the opening of the US stock market that evening, CoreWeave's stock price rose by about 20% during trading, and Nvidia, which had been down for two consecutive days, also rebounded.

The reason why the financial report of a computing power leasing company can drive the global market is largely because it responds to investors' biggest concern recently, whether the demand for AI computing power has slowed down.

As for whether CoreWeave can become the "savior" of this round of AI trading, there are still different opinions in the market.

The market is constantly bearish

In the month following the National Day holiday, the global AI computing power industry chain has hardly received any good news, and market concerns have spread from demand to funding and policies.

In early October, public information showed that OpenAI provided investors with annualized revenue data of nearly $50 billion, lower than the market's previous expectation of nearly $70 billion. OpenAI is one of the world's largest buyers of computing power, and its huge computing power orders have been questioned whether they can be fulfilled as scheduled, causing stock prices of companies such as NVIDIA and Oracle to fall.

In late October, US tech giants released their financial reports one after another, and Amazon, Alphabet, and Meta all had negative free cash flows for the third quarter of 2026. When the huge investment in AI can be recovered has begun to be questioned by investors, and Alphabet's stock price fell more than 12% on October 29th.

At the same time, inflation in the United States remains high, and market expectations for the Federal Reserve to raise interest rates continue to rise. As a result, financing costs for businesses have increased, putting pressure on computing rental companies that rely on borrowing to build data centers. Taking CoreWeave as an example, as of the end of September 2026, its debt size is close to $47 billion, with interest expenses in the third quarter alone reaching $846 million; In early November, the yield of some of its bonds briefly rose to over 16%. The rise in bond yields to such a level indicates that creditors have doubts about their ability to repay debts.

On November 3rd, the midterm elections in the United States came to an end, and the Democratic Party won control of both houses of Congress. The market is now facing a 'blue wave impact', and investors believe that the construction of AI data centers in the United States will be subject to more restrictions. According to UBS estimates, about 30% of the expected new data center capacity in the United States in 2028 may be affected by potential construction suspension measures.

On November 5th, the market value of the constituent stocks of the S&P 500 index evaporated by about $3 trillion in one day, and Nvidia's stock price fell by 9.26% in a single day. On November 6th, market sentiment spread to Asia, with the South Korean Composite Index closing down 6.02% and Zhongji Xuchuang falling about 9% that day.

Since November 9th, the personal scandal of Nvidia CEO Huang Renxun has triggered a market sell-off, causing Nvidia's market value to evaporate by over $430 billion within two trading days.

Moreover, OpenAI's revenue, tech giant's cash flow, financing costs, and the "blue wave shock" are all interrelated negative factors - the lower the stock price, the harder it is for computing companies to raise funds; The more difficult it is for computing companies to raise funds, the more worried the market is about the difficulty of building data centers; The construction of data centers is slowing down, and the market's expectations for upstream chip and equipment orders are becoming increasingly pessimistic.

As a result, various concerns in the market ultimately point to a question: does AI computing power really need to be built so much?

Computing power is still in short supply

Whether the demand for computing power is slowing down, companies that rent computing power are often the first to notice.

CoreWeave's business is to purchase Nvidia's graphics processing units (GPUs), build data centers, and lease computing power to clients such as OpenAI, Microsoft, Meta, etc. according to contracts. Whether customers need computing power or are willing to offer any price will be reflected in their orders and quotes.

In this round of decline, CoreWeave is the most worried company in the market due to its high debt and large-scale construction of data centers. In January 2026, Nvidia invested an additional $2 billion in CoreWeave at a price of $87.20 per share, and as of the close on November 10, CoreWeave's stock price was $48.73, significantly lower than Nvidia's investment price. If its financial report falls short of expectations, the market's concerns about the AI computing power chain may further deepen.

But CoreWeave's performance exceeded its previous guidance: in the third quarter of 2026, its revenue increased by more than $1 billion compared to the previous quarter, exceeding the guidance limit; The adjusted operating profit was $379 million, compared to the previous guidance range of $200 million to $260 million. CoreWeave has also raised its annual revenue guidance to $13 billion to $13.3 billion.

Breaking the expectations of all institutions and everyone, "a communication industry analyst from a large securities firm in southern China commented on the financial report to Economic Observer reporters. He believes that CoreWeave's revenue and profits are better than market expectations, and after more than a month of continuous decline in computing stocks, such a financial report has a significant boost to market sentiment.

During the earnings conference call, Michael Entratto, CEO of CoreWeave, stated that "the growth in computing power demand is faster than the ability to deliver these infrastructures." According to him, the effective demand received by CoreWeave is equivalent to 10 times the production capacity that can be provided by the end of 2027, and the production capacity by 2027 has been basically sold out. The financial report also shows that as of the end of September 2026, CoreWeave's on hand orders were approximately $132.5 billion, a year-on-year increase of 138%.

In response to concerns about oversupply in the industry, Entratuo stated that there is indeed a large amount of computing infrastructure being put into the market, but the speed of AI popularization in various industries is faster. He also mentioned that 10% of the Fortune 500 companies in the United States are CoreWeave's customers, and more than half of the new customers added in 2026 will come from outside the AI and technology industries.

In terms of pricing, Interlato stated that CoreWeave raised prices for various products by 25% in July 2026, followed by a 10% increase in the latter part of the third quarter, and prices continued to rise in the fourth quarter.

In addition, regarding Nvidia's Ampere and Hopper generations of GPUs, although they were released in 2020 and 2022 respectively and are no longer the latest products, according to Entratuo's introduction, in the third quarter of 2026, the rental price of CoreWeave's computing power for these two generations of GPUs increased by 30% to 50% month on month. Generally speaking, if there is an excess of computing power, the older generation chips will be the first to lower their prices.

Entratuo also mentioned that in 2027, CoreWeave's contracts for over 130000 GPUs will expire, and the renewal of these contracts alone can bring nearly $4 billion in annualized revenue growth without the need for additional capital expenditures.

Additionally, CoreWeave's data center is still undergoing expansion. As of the end of September 2026, its contracted power capacity exceeds 4.6 gigawatts (GW), of which over 1.7 GW has been put into operation. The related data center still needs to be constructed, and the procurement of related equipment will continue.

At least, according to CoreWeave's financial report information, there are no signs of excessive computing power yet.

On November 11th, the A-share computing power industry chain also rebounded. In addition to Zhongji Xuchuang and Xinyisheng, optical device company Tianfu Communication (300394.SZ) rose 13.96%, and optical chip company Yuanjie Technology (688498. SH) hit the limit up.

Market pressure still exists

But beyond demand, there are also negative factors in both funding and policy directions weighing on AI computing stocks.

CoreWeave's data center is mainly built through borrowing, and when its bond yields rose sharply in early November, the market was concerned that the company may not be able to borrow enough money in the future. But CoreWeave stated in its financial report that it expects to receive approximately $9 billion in customer prepayments and deposits over the next three months.

During the conference call, Entratuo also stated that at the current yield level, CoreWeave will not raise funds through the unsecured bond market, and "there is no need for that".

In other words, a portion of the funding required for CoreWeave to build data centers is paid in advance by customers and does not rely on the bond market in the short term.

CoreWeave's Chief Financial Officer Nitin Agarwal also stated during a conference call that the next loan linked to customer contracts is expected to have a financing cost between 7% and 7.5%. He also stated that the cash flow generated by existing customer contracts is sufficient to repay the corresponding debts; If only orders that have already been signed are delivered, CoreWeave's capital expenditures in 2027 will remain the same as in 2026, and revenue will increase significantly. Adjusted net profit is expected to turn positive in the first half of 2028.

To establish a cycle of declining stock prices, difficulty in financing, and slowing down construction, the prerequisite is that computing companies really cannot borrow money. At least according to CoreWeave's statement, this situation has not yet occurred.

Regarding the policy risks brought about by the 'blue wave', Entratuo stated that all permits for CoreWeave's planned projects to be delivered in 2027 have been obtained and are under construction, and it is expected that they will not be affected by changes in the regulatory environment. He also mentioned that if the construction of data centers in the entire industry slows down, the already built computing power will become even scarcer.

However, the negative pressure on AI computing stocks has not been completely eliminated - the US core inflation data for October released on November 10th exceeded market expectations, further fueling market expectations for the Federal Reserve's interest rate hike in December; It is still unclear where the restrictions on data center construction in various states of the United States will go; The investigation into Huang Renxun by the NVIDIA board of directors has not yet reached a conclusion.

As for CoreWeave itself, its net loss in the third quarter of 2026 was $709 million, higher than the $110 million in the same period last year.

According to a research report released by Bernstein after the release of CoreWeave's financial report, this is almost the best quarterly report that CoreWeave can deliver, but once the shortage of computing power is alleviated, CoreWeave will still be one of the first and hardest hit companies.

In the past month, the reasons for the capital market to sell AI computing stocks have been constantly changing, from OpenAI's revenue, cloud vendors' cash flow, to financing costs and the "blue wave impact". What has been suspected is actually the demand for computing power.

A single financial report from a company is not enough to answer all questions. Whether CoreWeave can become the "savior" of this round of AI trading still needs to be tested by more companies' financial reports and a longer period of time.

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