Nvidia Shares Rise Pre-Market as CoreWeave Beats Q3 Estimates
Nvidia shares gained more than four percent in pre-market trading on Wednesday, driven by strong quarterly results from AI cloud provider CoreWeave, following a significant share price decline triggered by reports of an alleged affair involving CEO Jensen Huang.
Nvidia's stock has put the first dent in its recent downward trend behind it on Wednesday. In pre-market trading, the shares rose by more than four percent after AI cloud provider CoreWeave presented strong figures for the third quarter. For investors, this is an important signal at a time when the chipmaker has been under considerable pressure.
Nvidia's share price had previously fallen sharply. Within five trading days, the stock lost around 15.6 percent, and over the course of a month, it was about 26 percent. The trigger was reporting about an alleged extramarital relationship between company chief Jensen Huang and an alleged Chinese spy. Nvidia's board of directors is now reviewing the matter and its possible impact on the company. Betting markets currently assume that Huang will remain at the head of the company for the time being.
At the center of the latest price movement is CoreWeave, one of the so-called neocloud providers that supply computing capacity for artificial intelligence. The company's revenue in the third quarter came to 3.66 billion US dollars, above the estimate of 3.55 billion dollars. Year over year, this corresponds to an increase of 168 percent. CoreWeave also raised its revenue forecast for 2026 from 13 to 13.3 billion dollars. The company's shares rose by more than 15 percent in pre-market trading.
The connection between the two companies is close. Nvidia invested two billion dollars in CoreWeave in January and is thus its second-largest shareholder. Neocloud companies such as CoreWeave have recently come under particular pressure, as investors fear that too much money is being spent in the AI sector. In the month before the results, the CoreWeave share had lost around 40.6 percent. The company's strong performance therefore acted as a counterweight to this general skepticism, and its success rubbed off on the larger partner.
However, the recovery falls into a phase of growing caution among analysts. Baird downgraded Nvidia from Outperform to Neutral, and Morgan Stanley removed the stock from its list of top picks. Whether today's gain will last will likely depend on how the affair surrounding Jensen Huang develops and whether investments in the AI sector continue to be considered sustainable. Until then, market sentiment remains divided, even though the share price, after the decline of recent weeks, is at least temporarily moving upward again.
Source: fastcompany.com
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