Jim Cramer expressed growing confidence in CoreWeave following the company's better-than-expected quarterly revenue and an increase in its 2026 guidance, which alleviated fears about a slowdown in AI infrastructure spending. CoreWeave's shares jumped nearly 25% after the earnings announcement, although they remain down 15% year-to-date and 55% from their 52-week high of $138.
CEO Michael Intrator revealed that demand for their computing capacity is ten times greater than supply, allowing for consistent price increases and stronger gross margins. Intrator also addressed concerns about the company's significant debt by highlighting a shift towards financing backed by equipment and customer contracts rather than traditional bond markets.
Additionally, he noted that some Nvidia H100 chips are now being contracted at premiums of 20% to 50%, indicating that the equipment is retaining value longer than expected. Cramer acknowledged the political and financing risks in the AI infrastructure sector but suggested that avoiding investments in this area could mean missing out on substantial growth opportunities.
While the CNBC Investing Club has reduced exposure to neoclouds, it maintains diversified investments in related sectors benefiting from the AI boom