Shares of CoreWeave, Inc. (CRWV) plummeted 5.02% in Thursday's intraday trading session, as the initial enthusiasm surrounding Nvidia's strong earnings report gave way to a broader sell-off in artificial intelligence (AI) stocks. The volatility in CoreWeave's stock price reflects the complex dynamics currently at play in the AI sector.
Early in the day, CoreWeave's stock had surged by as much as 10% following Nvidia's better-than-expected quarterly results. Nvidia, a key supplier and investor in CoreWeave, reported data center sales climbing 66% year-over-year, surpassing $50 billion for the first time. This initially boosted confidence in AI infrastructure companies like CoreWeave, which relies heavily on Nvidia's chips for its cloud computing services.
However, the optimism was short-lived as investors began to digest additional economic data, particularly a stronger-than-expected September jobs report. This report lowered expectations for a potential December interest rate cut by the Federal Reserve, causing concern that higher borrowing costs could disproportionately affect high-growth tech stocks. As a result, the broader tech sector, including AI-related stocks, experienced a significant pullback. By midday, CoreWeave had not only lost its morning gains but also declined further, contributing to the 5.02% drop.
The reversal in CoreWeave's stock price highlights the current volatility and uncertainty surrounding AI stocks. While the long-term outlook for AI remains positive, with Nvidia CEO Jensen Huang projecting a total addressable market between $3 trillion and $4 trillion for AI infrastructure by 2030, short-term market dynamics and macroeconomic factors continue to influence investor sentiment. As the AI sector matures, companies like CoreWeave may face ongoing volatility as the market balances growth potential against economic realities.