- Berenberg’s Ulrich Urbahn said investors are buying back at lower valuations.
- CoreWeave plans to rely mainly on contract-backed financing rather than unsecured debt at current yields, addressing a key concern hanging over AI infrastructure spending.
- Goldman Sachs’ James Schneider called AI stocks “clearly in oversold territory” but cautioned that catalysts for a sustained rally could be limited before year-end.
Nasdaq-100 futures jumped nearly 2% on Wednesday morning, pointing to a sharply higher open for the technology-heavy index as artificial intelligence (AI) related stocks rallied premarket after CoreWeave’s third-quarter earnings revived confidence in the AI trade.
The results followed a selloff in AI stocks amid concerns over rising financing costs, heavy borrowing and potential data center construction delays, with investors questioning whether demand and future cash flows could sustain the industry's infrastructure spending.
The AI cloud provider had been at the center of those concerns, as investors questioned whether demand and future cash flows could support the industry's infrastructure spending.
The AI cloud provider’s stronger-than-expected results helped fuel a broad rally across semiconductor, memory, and data center infrastructure companies, as investors reassessed concerns about AI spending, financing costs, and the sustainability of demand for computing capacity.
CoreWeave Earnings Ease AI Financing Concerns
CoreWeave reported third-quarter (Q3) revenue of $3.66 billion, up 168% year over year, and raised its 2026 revenue guidance to between $13 billion and $13.3 billion.
The company also expects approximately $9 billion in customer prepayments and deposits over the next three months, outlining plans to rely primarily on contract-backed financing rather than unsecured debt at current yields.
Memory and Chip Stocks, including SanDisk (SNDK), Micron Technology (MU), Advanced Micro Devices (AMD), Nvidia (NVDA), and Broadcom (AVGO), climbed 4% to 8% in the pre-market session.
Other notable gainers included Coherent (COHR), Lumentum (LITE), Marvell Technology (MRVL), CoreWeave (CRWV), and Seagate Technology (STX).
AI-linked stocks have faced sharp selling pressure over the past month, with the Philadelphia Semiconductor Index (SOX) falling roughly 20%. However, AI trade is now recovering on hard demand evidence rather than sentiment, according to Berenberg's Ulrich Urbahn.
“Investors are buying back into positions with valuations now considerably lower.” The analyst told Bloomberg. The iShares Semiconductor ETF (SOXX), which tracks U.S.-listed chip stocks, rose 5% in premarket trading today.
On Stocktwits, retail sentiment around SOXX, the ETF that tracks U.S.-listed semiconductor stocks, remained ‘bullish,’ with the ETF ranking among the platform’s top trending tickers.
Goldman Sachs analyst James Schneider believes AI stocks are now “clearly in oversold territory.”
However, he highlighted two concerns weighing on semiconductor stocks: how AI companies will finance capital expenditure beyond their free cash flow, and whether sufficient land, power and data center capacity will become available to support projected demand.
According to the Yahoo Finance report, Schneider highlighted Nvidia, Broadcom and AMD as three top names to buy, saying Nvidia and Broadcom traded at 12 and 13 times, respectively, a 2028 baseline assuming no growth — a scenario he considers relatively unlikely.
The analyst described their valuations as compelling at current levels, while calling AMD “very attractive” for its growth potential, albeit at a less compelling valuation. Despite seeing attractive risk-reward opportunities in select stocks, Schneider cautioned that catalysts for a sustained rally could remain limited before year-end.