Core Companies in AI - Nvidia and Palantir Technologies have demonstrated significant strengths in artificial intelligence, leading to substantial earnings growth and stock performance [1][2] - CoreWeave, a new entrant in the market, has emerged as a potential AI powerhouse, outperforming both Nvidia and Palantir with a remarkable 300% stock increase in the first half of 2025 [2][4] CoreWeave's Business Model - CoreWeave generates most of its revenue by renting access to over 250,000 Nvidia GPUs, specializing in AI workloads [4][6] - Nvidia holds a 7% stake in CoreWeave and facilitated the launch of its latest GPUs, indicating a strong partnership [6] Financial Performance - CoreWeave's first-quarter earnings report showed a revenue increase of over 400% year over year, reflecting strong demand for Nvidia's chips [7] - The company's technology and infrastructure expenses surged by more than 500% to approximately $500 million in the first quarter, indicating high capital investment needs [10] Market Trends - The demand for GPUs is expected to grow as more organizations apply AI to real-world problems, particularly in the area of inferencing, which requires significant processing power [8] - CoreWeave's cloud servers are anticipated to have a busy future, driven by ongoing demand for AI capabilities [8] Strategic Moves - CoreWeave plans to acquire Core Scientific, which will eliminate $10 billion in future lease payments, although the stock fell due to concerns about share dilution from the all-stock deal valued at $9 billion [12] - The acquisition is seen as a strategic move to enhance operational efficiency and reduce costs in the long term [12] Investment Considerations - For cautious or value investors, exploring other opportunities may be advisable, while aggressive investors may find it a good time to invest in CoreWeave due to its access to Nvidia's latest GPUs and potential for long-term gains [13]

Core Viewpoint - Palantir Technologies shares have increased by 400% over the past year, with a current market value of $335 billion, while predictions suggest Uber Technologies and CoreWeave could reach $340 billion by late 2028, presenting significant implications for shareholders [1] Group 1: Uber Technologies - Uber holds a 76% share in the U.S. ride-sharing market and ranks second in the restaurant food delivery market with a 24% share, also leading in ride-sharing services in nine other countries and food delivery in eight countries [3] - The company reported a 14% increase in monthly active users and an 18% rise in total trips, leading to a 14% revenue growth to $11.5 billion, driven by mobility and delivery segments, despite a decline in freight sales [4] - Adjusted EBITDA rose by 35% to $1.9 billion, indicating strong operational performance [4] - Although not a traditional AI stock, Uber utilizes AI for route optimization and pricing, with autonomous vehicles seen as a potential catalyst for growth, supported by partnerships with companies like Waymo and Motional [5][6] - Current market value of Uber is $201 billion, with a potential increase to $340 billion by late 2028, suggesting a 69% rise in stock price to $163 per share, equating to annual returns of approximately 16% [7] - Projected earnings growth of 26% annually over the next three to five years could support a valuation of $340 billion at a reasonable 12.4 times earnings by 2028 [8] Group 2: CoreWeave - CoreWeave specializes in cloud infrastructure and software services for AI and high-performance computing, closely collaborating with Nvidia to deploy new technologies [9] - The company was recently ranked as the leading AI cloud by SemiAnalysis, outperforming major competitors like AWS and Microsoft Azure [10] - CoreWeave reported a remarkable 420% revenue increase to $981 million and a 550% rise in adjusted operating income to $162 million [10] - Plans to acquire Core Scientific in an all-stock transaction aim to enhance efficiency through vertical integration, potentially eliminating $10 billion in future lease overhead [11] - This acquisition is expected to lower the cost of capital for CoreWeave, enhancing operational efficiency in deploying AI and HPC workloads [12] - Current market value of CoreWeave is $63 billion, with a potential increase to $340 billion by late 2028, indicating a 440% rise in stock price to $702 per share, translating to annual returns of about 62% [7] - Revenue is forecasted to grow at 69% annually through 2028, supporting a valuation of $340 billion at a more reasonable 20 times sales [12]

Core Viewpoint - CoreWeave is acquiring Bitcoin miner Core Scientific in a $9 billion all-stock deal, which is expected to yield significant benefits with limited risks compared to typical large acquisitions [1][2]. Group 1: Benefits of the Acquisition - The acquisition allows CoreWeave to secure future capacity, achieve operational cost savings, and lower financial costs of capital [2]. - CoreWeave will gain Core Scientific's 1.3 Gigawatt (GW) data center footprint, including 840 Megawatts (MW) leased to CoreWeave and 500 MW of Bitcoin mining infrastructure [3]. - The acquisition includes over 1 GW of future power capacity contracted with power providers, addressing the current bottleneck in AI growth [4]. - CoreWeave will save $10 billion in future lease payments, resulting in over $500 million in annual savings by the end of 2027, translating to an 18 forward P/E multiple on the acquisition value [5][6]. - The combined companies are expected to save "several hundred basis points" on interest rates for future debt financing due to increased size and scale [7]. Group 2: Risk Mitigation - CoreWeave is financing the acquisition entirely with equity, avoiding increased leverage and debt risks [10]. - The high stock price of CoreWeave, which has quadrupled in the past three months, makes the acquisition appear cost-effective [11]. - The automatic realization of cost savings from eliminating $10 billion in future lease payments mitigates typical acquisition risks [12]. Group 3: Core Scientific's Perspective - Core Scientific is pivoting from less profitable Bitcoin mining operations and sees the acquisition as a strategic move to align with CoreWeave's growth in AI [14][16]. - The transition to an AI data center host is seen as a more attractive business model compared to its previous operations [15]. Group 4: Future Outlook - The acquisition is expected to close in the fourth quarter of this year, strengthening CoreWeave's position in the market [17]. - While the acquisition reduces certain risks, CoreWeave's high valuation and relationship with Nvidia still present challenges [18].

Group 1 - Needham downgraded CoreWeave's rating from "Buy" to "Hold," citing that the $9 billion acquisition of Core Scientific is strategically significant but appears overvalued [1] - The acquisition is expected to release an additional 150MW to 200MW of IT capacity for high-performance computing (HPC) and AI workloads [1] - Analysts believe the deal will provide CoreWeave with high-quality underlying infrastructure, reduce capital costs through asset-backed securities financing, save $500 million in annual operating expenses, and bring in an internal data center operations team [1] Group 2 - Following the acquisition announcement, several securities firms, including Stifel and Mizuho, downgraded their ratings on CoreWeave [2] - As of Thursday's market close, CoreWeave's stock fell by 9.64% to $138.29, despite a year-to-date increase of 246% [2]

Core View - CoreWeave's stock experienced a significant pullback of 9.6% despite the S&P 500 rising by 0.3% and the Nasdaq Composite remaining flat [1][2][4] Valuation and Rating Changes - An investment firm, Needham, downgraded CoreWeave's rating from buy to hold, raising valuation concerns while acknowledging the potential benefits of the $9 billion all-stock acquisition of Core Scientific [4][5] - Despite the recent pullback, CoreWeave's share price has increased approximately 246% since its IPO in April [2][4] Acquisition Impact - The acquisition of Core Scientific is expected to close in the fourth quarter and aims to enhance CoreWeave's capabilities in AI processing and high-performance computing [5] - The issuance of new stock to fund the acquisition may raise valuation concerns among investors, particularly following a significant increase in stock price [4][5]

Core Acquisition Overview - CoreWeave, Inc. has agreed to acquire Core Scientific, Inc. in an all-stock transaction valued at approximately $9 billion, aimed at modernizing AI and high-performance computing infrastructure [1][8] - The acquisition is part of CoreWeave's strategy to deepen vertical integration, accelerate growth, enhance operational efficiency, and achieve long-term market leadership [1] Transaction Details - CoreWeave will issue 0.1235 shares of its Class A common stock for each share of Core Scientific, valuing Core Scientific at $20.40 per share, which is a 66% premium over its unaffected closing price as of June 25, 2025 [2] - The transaction is expected to close in the fourth quarter of 2025, with Core Scientific shareholders owning less than 10% of the combined company post-acquisition [2] Infrastructure and Financial Impact - CoreWeave will gain Core Scientific's 1.3 GW power infrastructure, with an additional 1 GW expansion potential, providing significant growth opportunities for AI infrastructure [2] - The acquisition will allow CoreWeave to eliminate $10 billion in lease obligations, leading to projected annual cost savings of $500 million by the end of 2027 [3][8] - The combination of Core Scientific's capabilities in data center construction and power procurement with CoreWeave's expertise in AI and HPC cloud workloads will create a more vertically integrated company [3] Strategic Acquisitions - CoreWeave is focused on acquisitions to enhance AI advancements across industries, strengthen existing infrastructure, and improve customer engagement, which is expected to lead to higher revenues and shareholder value [4] Competitive Landscape - CoreWeave faces competition from Nebius Group N.V., which is building its AI infrastructure business through organic growth and has raised $72 million for its ventures [5] - Microsoft is a major player in AI infrastructure, investing $16.7 billion in cloud and AI infrastructure in the third quarter of fiscal 2025, further solidifying its position in the market [6] Stock Performance - CoreWeave's shares have gained 282.6% year to date, significantly outperforming the Internet Software industry's growth of 17.7% [7]

Group 1 - The video discusses the deal between CoreWeave and Core Scientific, highlighting its potential impact on other AI infrastructure players [1] - Stock prices referenced were from July 8, 2025, indicating the relevance of the timing of the analysis [1]

Core View on CoreWeave - CoreWeave's stock has increased by 160% since the last bullish coverage, driven by power-limited and data center supply shortages amid the race for AI leadership [1] - The company is strategically positioned to capitalize on the growing demand for AI infrastructure [1] Leadership & Management Analysis - CoreWeave demonstrates a proven track record in scaling businesses, with smart capital allocation and insider ownership [1] - The company has shown consistent revenue growth and provides credible guidance [1] Market Disruption & Competitive Positioning - CoreWeave possesses a strong technology moat and first-mover advantage in the AI sector [1] - The company benefits from network effects that drive exponential growth and has achieved market penetration in high-growth industries [1] Financial Health & Risk Management - CoreWeave exhibits sustainable revenue growth with efficient cash flow management [1] - The company maintains a strong balance sheet and a long-term survival runway, avoiding excessive dilution and financial weakness [1] Valuation & Asymmetric Risk/Reward - CoreWeave's valuation is assessed through revenue multiples compared to peers and DCF modeling [1] - The company has institutional backing and positive market sentiment, ensuring downside protection with significant upside potential [1] Portfolio Construction & Risk Control - CoreWeave's investment strategy includes core positions (50-70%) in high-confidence, stable plays, growth bets (20-40%) in high-risk, high-reward opportunities, and speculative investments (5-10%) in moonshot disruptors [1]

Core Insights - CoreWeave is the first cloud platform to offer NVIDIA RTX PRO 6000 Blackwell Server Edition instances, enhancing AI innovation capabilities for enterprises and startups [1][2] - The new RTX PRO 6000 instances provide significant performance improvements, achieving up to 5.6x faster LLM inference and 3.5x faster text-to-video generation compared to previous generations [2][4] - CoreWeave's platform supports a wide range of NVIDIA Blackwell infrastructure, allowing customers to select optimal architectures for their specific AI needs [3] Performance and Features - The RTX PRO 6000-based instances are equipped with 8x RTX PRO 6000 GPUs, 128 Intel Emerald Rapids vCPUs, 1TB System RAM, 100 GBps Networking Throughput, and 7.68TB local NVMe storage, optimized for AI workloads [5] - CoreWeave has achieved the highest Platinum rating by SemiAnalysis's GPU Cloud ClusterMAX™ Rating System, indicating superior performance in the AI cloud industry [5] Industry Position - CoreWeave has a history of being first to market with advanced hardware solutions, previously offering NVIDIA H200 GPUs and NVIDIA GB200 NVL72 systems [4] - The company has been recognized as one of the TIME100 most influential companies and featured in the Forbes Cloud 100 ranking in 2024, highlighting its impact in the AI cloud sector [6]

Investment Rating - The report assigns a "Neutral" rating for CoreWeave (CRWV.O) based on its current market performance and outlook [4]. Core Insights - CoreWeave announced the acquisition of Core Scientific for approximately $9 billion in an all-stock transaction, aimed at accelerating its AI data center strategy [1]. - Following the announcement, CoreWeave's stock fell by 3% on July 7 and continued to decline by 5% on July 8, while Core Scientific's stock dropped nearly 18% on the same day [1]. - The acquisition is expected to be completed in Q4 2025, pending regulatory and shareholder approvals [8]. Financial Projections - Revenue is projected to grow significantly from $229 million in 2023 to $16.418 billion by 2027, with operating profit turning positive by 2024 [3]. - Adjusted net profit is expected to improve from a loss of $45 million in 2023 to a profit of $1.08 billion in 2027 [3]. - The price-to-sales ratio is forecasted to decrease from 317.5 in 2023 to 4.4 by 2027, indicating improved valuation metrics over time [3]. Transaction Details - The exchange ratio for the acquisition is set at 1:0.1235, with Core Scientific shareholders expected to hold less than 10% of the combined company post-transaction [8]. - The acquisition price of $20.40 per share represents a 66% premium over Core Scientific's stock price prior to acquisition discussions [8]. - CoreWeave aims to leverage Core Scientific's existing 1.3 GW power capacity data centers, with plans to repurpose mining facilities for high-performance computing [8]. Strategic Implications - The acquisition reflects a broader trend where cloud service giants are moving towards owning core energy assets rather than relying on power leasing [9]. - CoreWeave's integration of Core Scientific is anticipated to enhance operational efficiency and reduce future leasing costs, potentially saving over $5 billion in operational costs by 2027 [8]. - The ownership of critical power resources is expected to unlock approximately $5 billion in financing opportunities, which could lower the company's weighted average cost of capital (WACC) [8]. Market Performance - CoreWeave's stock has shown volatility, with a 1-month return of -7% and a 3-month return of 211% [5]. - The market is concerned about the high valuation premium associated with the acquisition, especially given Core Scientific's significant projected losses in 2024 [12]. - Investors are advised to monitor CoreWeave's contract renewals with key clients like Microsoft and OpenAI, as well as its ability to secure financing at lower rates [10].