CRWV +19% and SMCI +13%: Why AI Stocks Are Screaming Higher
Two different models riding the same hype wave
On August 12, shares of CoreWeave (CRWV) and Super Micro Computer (SMCI) climbed to their highest levels since June as both firms reported bullish outlooks. CoreWeave stock jumped more than 19 percent, while Super Micro Computer rose more than 13 percent. This move was not a random fluctuation. It was a reaction to specific data points released the day before.
CoreWeave operates a unique business model focused on leasing compute capacity. The latest data shows this model is under massive pressure to deliver. The company raised its forecasts for annual revenue, adjusted operating profit, and capital spending following its report on August 11. Its revenue backlog ballooned to $104.2 billion in the second quarter, up from $99.4 billion just three months prior. This number does not even include the $25 billion in new commitments signed early in the current quarter. MoffettNathanson analysts noted that the pricing environment suggests project returns are strengthening even as unit costs climb. If these gains hold, CoreWeave is on track to add roughly $8 billion to its market value. More than seven brokerages have raised price targets on the stock.
Super Micro Computer takes a different route by selling the physical servers that power these clouds. Its fiscal 2027 revenue forecast beat Wall Street estimates, driven by a massive improvement in gross margins. The company reported a fourth-quarter gross margin of 17.5 percent. This figure trounced its preliminary estimate of 15 percent to 17 percent and its original forecast of 8.2 percent to 8.4 percent. This shift to higher-margin products is a key narrative for the stock. However, its growth depends entirely on sustained hyperscaler spending. Major banks are now racing to capitalize on this capital flight.
The financing landscape is heating up. Bank of America pledged $250 billion for US infrastructure financing by July 2027. Morgan Stanley is also active in this sector. This influx of capital is the fuel for the current rally. Nvidia, which supplies the chips for both companies, is held by 275 hedge funds. Both CoreWeave and Super Micro Computer are seeing their hedge fund counts rise. CoreWeave is held by 63 hedge funds, up from 58, while Super Micro Computer is held by 49 hedge funds, up from 39. These numbers indicate that the smart money is betting on the survival of the AI buildout.
Despite the optimism, risks remain. CoreWeave has funded nearly all of its construction and development through debt. The surge in AI capital spending has created a parallel market for hedging against default risk among heavily indebted hyperscalers. The stock has also been volatile, falling roughly 30 percent from May to August results before this latest rally. Super Micro Computer’s gains rely on the pace continuing. Neither company controls when that spending slows down.
First reported by Insider Monkey.
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