Economic Observer reporter Zheng Chenye
Just a week ago, many in the market still believed that this round of stock market trend driven by AI had "come to an end."
Judging from recent market performance, there have been continuous negative factors for the global AI computing power industry chain: The NASDAQ index fell by 5.3% in October and another 5.52% on November 5th, recording the largest single-day decline since April 2025; the next day, South Korea's stock market triggered a circuit breaker during trading; in the A-share market, the stock price of Zhongji Xuchuang (300308.SZ), a company specializing in optical modules, closed at 448 yuan on November 6th, a decrease of over 67% from its high point within the year in June.
After the U.S. stock market closed on November 10th, Eastern Time, the American computing power leasing company CoreWeave ( CRWV.O ) released its financial report for the third quarter of 2026. The report showed that CoreWeave achieved revenue of $3.66 billion in that quarter, a year-on-year increase of 168%, and also raised its annual revenue forecast.
CoreWeave has received multiple investments from NVIDIA (NVDA.O), and is known in the market as "NVIDIA's favorite child." During the recent stock market downturn, it was one of the companies most affected, with its stock price falling by over 40% in the month before its financial report was released.
After the financial report of CoreWeave was released, there was a rebound in global AI computing power stocks. On November 11th, Zhongji Xuchuang and Xinyisheng (300502.SZ) in the A-share market rose by 15.07% and 16.97% respectively, both setting the largest single-day increases of the year; the stock markets in South Korea and Taiwan, China rose by 2.6% and 3.6% respectively. After the opening of the US stock market that evening, the price of CoreWeave stocks rose by about 20% during trading, and NVIDIA, which had been falling for two consecutive days, also saw a rebound.
The reason why the financial report of a computing power leasing company is able to drive the global market is largely because it addresses a concern that investors have recently been most worried about, namely whether the demand for AI computing power has slowed down.
As for whether CoreWeave can become the “savior” of this round of AI transactions, there are still different opinions in the market.
Continuous negative market factors
In the more than month following the National Day holiday, the global AI computing power industry chain hardly received any good news, and market concerns spread from demand to funding and policies as well.
In early October, public information revealed that OpenAI provided investors with annual revenue data of nearly $50 billion, which was lower than the market's previous expectation of nearly $70 billion. OpenAI is one of the largest buyers of computing power in the world, and there were doubts immediately about whether its large-scale computing power orders could be fulfilled on time. As a result, the stock prices of companies such as NVIDIA and Oracle declined accordingly.
In late October, major U.S. tech giants released their financial reports one after another. Amazon, Alphabet, and Meta all reported negative free cash flows in the third quarter of 2026. Investors began to question when the huge AI investments would be recouped, and the stock price of Alphabet fell by more than 12% on October 29th.
Meanwhile, inflation in the United States remains high, and market expectations for the Federal Reserve to raise interest rates continue to rise. As a result, the financing costs for businesses have increased, with data center computing power leasing companies that rely on debt to build their infrastructure being among the first to feel the pressure. Taking CoreWeave as an example, by the end of September 2026, its debt scale approached $47 billion, and interest expenses alone in the third quarter amounted to $846 million; in early November, the yield on some of its bonds briefly rose above 16%. Such a rise in bond yields indicates that creditors have doubts about its ability to repay its debts.
On November 3rd, the U.S. mid-term elections came to an end, with the Democratic Party gaining control of both the Senate and the House of Representatives. As a result, the market faced what is known as a "blue wave impact," with investors believing that the construction of data centers in the United States will face more restrictions. According to UBS' estimates, about 30% of the additional data center capacity expected to be added in the U.S. by 2028 could be affected by potential construction halts.
On November 5th, the market value of the components of the S&P 500 index evaporated by approximately $3 trillion in just one day, with NVIDIA's stock price falling by 9.26% on that same day. On November 6th, the negative market sentiment spread to Asia, with the South Korean Composite Index closing down 6.02%, and Zhongji Xuchuang's stock price falling by about 9% that same day.
Starting from November 9th, the personal controversies surrounding NVIDIA CEO Jensen Huang once again triggered a sell-off in the market. Within two trading days, NVIDIA's market value evaporated by over $430 billion.
Moreover, the negative factors such as the revenue of OpenAI, the cash flows of tech giants, financing costs, and the "blue tide impact" are interacting with each other: the lower the stock price, the more difficult it is for computing power companies to raise funds; the more difficult it is for computing power companies to finance, the more concerned the market is that data centers will not be built; as the construction of data centers slows down, the market's expectations for orders for upstream chips and equipment also become more pessimistic.
As a result, all the various concerns in the market ultimately point to one question: Is it really necessary to build such a large amount of computing power for AI?
Computing power is still in short supply.
Whether the demand for computing power has slowed down is often first noticed by companies that rent out computing power.
The business of CoreWeave involves purchasing graphics processors from NVIDIA (GPU), building data centers, and then renting out the computing power to customers such as OpenAI, Microsoft, and Meta according to the contract. Whether customers still need computing power and what price they are willing to pay will be reflected in their orders and quotes.
In this round of decline, CoreWeave is one of the companies that the market is most concerned about due to its high debt levels and the fact that its data centers are in a period of large-scale construction. In January 2026, NVIDIA made an additional investment of $2 billion in the company at a price of $87.20 per share. However, as of the close on November 10th, the stock price of CoreWeave was $48.73, which is significantly lower than NVIDIA's investment price. If its financial reports fall short of expectations, the market's concerns regarding AI's computing power chain may further deepen.
However, CoreWeave exceeded its previous guidance with its performance: in the third quarter of 2026, its revenue increased by over $1 billion compared to the previous quarter, surpassing the upper limit of the guidance; the adjusted operating profit was $379 million, while the previous guidance range was $200 million to $260 million. CoreWeave also raised its full-year revenue guidance to $13 billion to $13.3 billion.
"It exceeded the expectations of all institutions and everyone," a communications industry analyst from a large securities firm in South China commented on this financial report to a reporter from Economic Observer. He believes that the revenue and profits of CoreWeave were better than market expectations, and after the computing power stocks had been declining for over a month, such a financial report had a very clear positive impact on market sentiment.
At the financial report conference call, Michael Intrato, CEO of CoreWeave, stated: "The demand for computing power is growing faster than the ability to deliver this infrastructure." According to him, the valid demand received by CoreWeave is equivalent to ten times the production capacity that can be provided by the end of 2027, and by 2027, the production capacity has been almost fully sold out. Financial report information also shows that as of the end of September 2026, CoreWeave had orders totaling approximately 132.5 billion US dollars, a year-on-year increase of 138%.
Regarding concerns about over-supply in the industry, Intrato responded that indeed a large amount of computing power infrastructure is being introduced into the market, but AI is spreading faster across various industries. He also mentioned that 10% of Fortune's top 500 companies in the United States are already customers of CoreWeave, and more than half of the new customers in 2026 come from outside of AI and the tech industry.
In terms of prices, Intrato stated that CoreWeave raised the prices of various products by 25% in July 2026, and by another 10% in the later part of the third quarter. After entering the fourth quarter, prices continued to rise.
Additionally, regarding NVIDIA's Ampere, Hopper, and GPU generations, although they were released in 2020 and 2022 respectively and are no longer the latest products, according to Intertao, in the third quarter of 2026, the rental prices for the computing power of these CoreWeave and GPU generations increased by 30% to 50% respectively compared to the previous quarter. Generally speaking, when there is an oversupply of computing power, older generation chips are the first to see price reductions.
Intertao also mentioned that in 2027, for CoreWeave, more than 130,000 contracts of GPU will expire. Renewing these contracts alone is expected to generate an annual revenue increase of nearly $4 billion, without the need for any additional capital expenditures.
In addition, the data center of CoreWeave is still under expansion. As of the end of September 2026, its contracted power capacity has exceeded 4.6 gigawatts ( GW ), of which more than 1.7 gigawatts are already in operation. Further construction of related data centers is still ongoing, and the procurement of related equipment will also continue.
At least, from the financial report information of CoreWeave, there are no signs of excess computing power yet.
On November 11th, the computing power industry chain in the A-share market also saw a rebound. In addition to Zhongji Xuchuang and Xinyisheng, Tianfu Communication (300394. SZ), a company specializing in optical components, saw a rise of 13.96%, while Yuanjie Technology (688498. SH), a company that manufactures optical chips, hit the daily limit up.
Market pressure remains.
But in addition to these demands, there are also negative factors in terms of both funding and policy that weigh on the AI computing power stocks.
The data center of CoreWeave was mainly built through debt financing. In early November, when the yield on its bonds soared, the market feared that the company might not be able to borrow enough funds in the future. However, CoreWeave stated in its financial report that it expects to receive approximately $9 billion in customer prepayments and deposits over the next three months.
Intertao also stated during the teleconference that, at current yield levels, CoreWeave will not raise funds through the unsecured bond market, 'and there is no need to do so either.'
In other words, a portion of the funds required by CoreWeave to build its data center is paid in advance by customers, so it does not rely on the bond market in the short term.
CoreWeave Chief Financial Officer Niting Agarwal also stated during the teleconference that the financing cost for the next loan, which is linked to customer contracts, is expected to be between 7% and 7.5%. He also mentioned that the cash flow generated from existing customer contracts is sufficient to repay the corresponding debts; if only the signed orders are delivered, CoreWeave's capital expenditures in 2027 will be on par with those in 2026, while revenue is expected to grow significantly, and the adjusted net profit is projected to turn positive in the first half of 2028.
Stock prices fall, financing becomes more difficult, and construction slows down. For this cycle to occur, the prerequisite is that mining companies truly cannot borrow money. At least based on what CoreWeave has stated, this situation has not yet arisen.
Regarding the policy risks brought about by the "blue wave," Intertato stated that the projects planned to be delivered in 2027 under the CoreWeave initiative have obtained all necessary permits and are currently under construction, and are not expected to 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 established computing power will become even more scarce.
However, the negative factors weighing on AI's computing power stocks have not completely dissipated – on November 10th, the release of the US core inflation data for October exceeded market expectations, further fueling market expectations for a Fed interest rate hike in December; it is still unclear to what extent states in the US will impose restrictions on data center construction; and the NVIDIA board of directors' investigation into Jensen Huang has not yet reached a conclusion.
In terms of CoreWeave itself, in the third quarter of 2026, its net loss was 709 million US dollars, which is higher than the 110 million US dollars in the same period of the previous year.
In a research report released after the CoreWeave financial report was published, research institution Bernstein pointed out that this is almost the best quarterly report CoreWeave has been able to deliver. However, once the shortage of computing power eases, CoreWeave will still be one of the first companies to be affected and the most severely impacted.
Over the past month or so, the reasons for selling AI computing power stocks in the capital market have been constantly changing, ranging from the revenue of OpenAI and the cash flow of cloud providers to financing costs and the "blue tide impact." What has actually been in doubt is the demand for computing power.
The financial report of one company alone is not sufficient to answer all questions. Whether CoreWeave can become the “savior” of this round of AI transactions still needs to be tested by the financial reports of more companies and over a longer period of time.
Mandatory requirements:
(Author: Zheng Chenye)
