After a hot October CPI print snapped the S&P 500’s two-day winning streak on Tuesday, the AI infrastructure trade came back this morning.
CoreWeave (NASDAQ: CRWV) sparked an overnight rally in the VanEck Semiconductor ETF (NASDAQ: SMH) after delivering a Q3 double beat and raising its full-year revenue outlook to $13.0 billion–$13.3 billion, ahead of consensus.
The print lit a fire under neocloud and data-center names, sending Nebius (NASDAQ: NBIS), IREN (NASDAQ: IREN), Applied Digital (NASDAQ: APLD), Hut 8 (NASDAQ: HUT), and Terawulf (NASDAQ: WULF) flying to the upside. Backing the bounce, Goldman Sachs analyst James Schneider noted that semiconductor stocks “are now clearly in oversold territory.”
Anthropic’s (ANT) upcoming IPO is already reported to be multiple times oversubscribed, according to Bloomberg, while The Information reports OpenAI generated $10 billion in Q3 revenue and is eyeing a $1.25 trillion fundraising round.
Still, not everyone is buying the AI perpetuity trade. Speaking on PreMarket Prep this morning, STN Chief Economist Blu Putnam warned that while AI has carried the tape for four years, “since ChatGPT came out in November 2022 AI has been driving the stock market, and AI is not driving anymore.” Putnam also cautioned that a December Fed rate hike is already baked into the market, and a January hike could be priced in next.
Here is what else is moving under the radar this morning:
- While chip peers bounce, Nvidia (NASDAQ: NVDA) was downgraded to Neutral at Baird over escalating Congressional concerns and removed as a top pick at Morgan Stanley.
- The Wall Street Journal reports SoftBank has racked up billions in losses on gas turbines after stockpiling enough capacity to power six Hoover Dams—potentially validating Elon Musk’s claim last week that SoftBank was defaulting on its turbine orders.
- Costco (NASDAQ: COST) declared a $30-per-share special cash dividend (a one-time $13.3 billion payout outside its regular dividend schedule) and reauthorized a $4 billion stock buyback.
STN Desk Takeaway: As our STN Market Conditions put it this morning, it’s a “bright, clear sunrise” following a risk-on Tuesday evening. CoreWeave’s blowout quarter and an oversubscribed Anthropic IPO are fueling a rebound across semis and neoclouds.
