AI stocks rebound on Wall Street as CoreWeave jumps after earnings

Stocks tied to artificial intelligence lifted the U. S. market on Wednesday, with the S&P 500 up 0.9 per cent and on track for a third gain in four days after last week’s selloff tied to worries about AI data center construction. The Nasdaq composite rallied 1.4 per cent, while the Dow Jones Industrial Average was down 56 points, or 0.1 per cent, as of 9:35 a. m. Eastern time. The split shows the recovery was concentrated in AI names rather than the broader market.

CoreWeave earnings calm funding worries

CoreWeave, which rents access to AI chips over the cloud, leaped 10.7 per cent after reporting a smaller loss for the latest quarter than analysts expected and raising its forecast for revenue this year to a level stronger than analysts expected. Chief executive Michael Intrator said the company expects roughly US$9 billion in customer prepayments and deposits in the next three months, along with other sources of cash to help pay its bills. Some analysts said that suggests progress toward being able to self-fund its business at a time when higher bond-market rates make borrowing more expensive.

Worries about AI spending had intensified after sweeping Democratic victories in last week’s U. S. midterm elections, on concern that Democratic control of statehouses could bring restrictions on construction of AI data centers and the industry broadly. Longer-running doubts also center on whether AI will produce enough profit and productivity to justify large investments. CoreWeave’s stronger outlook suggested demand is continuing for now, helping Micron Technology climb 5.6 per cent, Broadcom add 5.6 per cent, GE Vernova rise 3 per cent and Nvidia gain 2.9 per cent.

Split market leaves most stocks behind

For households with retirement accounts or index funds, the move matters because headline index gains masked uneven performance, with more stocks falling than rising within the S&P 500. Outside technology, Fossil Group soared 30.9 per cent after reporting stronger profit than expected and raising its revenue forecast, while StubHub sank 7 per cent after weaker summer results than analysts expected. Oil added pressure, with Brent crude up 1.2 per cent to $92.63, near the middle of its $72 to $120 range since the war with Iran pushed prices higher early this year. The U. S. bond market was closed for Veterans Day.

The rebound does not resolve the main risks for CoreWeave or the AI sector, including funding costs, future returns on AI investment and possible regulation of data centers. Nvidia also faces a separate issue, with its board investigating chief executive Jensen Huang after he admitted to a relationship with a businesswoman who allegedly fed intelligence and advanced chips to China. Abroad, South Korea’s Kospi jumped 2.6 per cent, Shanghai rose 0.5 per cent as China’s Singles Day shopping festival began, and Hong Kong’s Hang Seng fell 1 per cent.