CoreWeave, Nebius and other earnings drive the chip trade higher

Market Trends and Industry Dynamics - Global computing power remains in shortage, with GPU pricing continuing to rise and order visibility extending into 2027 and 2028 [1] - GPU rental prices climbed roughly 25% in July even for six-year-old chips like the A100, pointing to wider profit margins toward year-end [3] - Strong earnings performance across AI and chip-related companies like Foxconn, Lumentum, CoreWeave, Nebius, and Super Micro drove the chip trade higher following the July selloff [1] - Enterprise upgrades to newer systems generated robust demand, highlighted by Super Micro securing $60 billion in orders within a single quarter [5] Financial Performance and Business Operations - CoreWeave shares surged nearly 17% to 18% after its best quarter as a public company, driven by improved operating margins and raised revenue guidance [2] - CoreWeave reported a backlog of approximately $104 billion, excluding over $2 billion in new deals signed in July [2] - CoreWeave funded its entire infrastructure build-out with borrowed money, resulting in ballooning interest bills and keeping the company in a net loss despite operating margins improving to 5% [4] - Super Micro delivered a significant earnings beat with margins more than doubling the company's guidance, although revenue landed near the low end [4] Investment Opportunities and Potential Risks - Strong financial and operational results from cloud and AI infrastructure providers created ripple effects that benefited power and cooling companies such as Vistra and Vertiv [3] - Super Micro faces an ongoing market overhang due to an open investigation regarding its China GPU server chip shipments [5]