Morning in New York: Neoclouds to Test the Restoration of Confidence in the AI Sector

A daily review and forecast of events in the U.S. stock market by Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The main event following the close of trading on November 10 was CoreWeave’s (CRWV) earnings report. The current correction in the AI sector was initially triggered by concerns over debt financing, so the market’s reaction to the company’s results is important for the entire AI ecosystem. CoreWeave’s management stated that its capacity is virtually fully contracted through the end of 2027, and the company expects to receive approximately $9 billion in customer prepayments over the next three months. The reduction in uncertainty surrounding capital raising is particularly significant. At current interest rates, CoreWeave does not plan to raise unsecured debt through the end of 2027, and more than 75% of its capital expenditure commitments are tied to large corporate customers and investment-grade clients. An additional positive sign was the 30–50% quarter-over-quarter increase in rental rates for previous-generation accelerators. At the same time, debt risks remain: CoreWeave’s interest expenses for the quarter totaled $846 million, compared with operating income of $207 million. The sustained rise in the company’s stock price during the main trading session, as well as its positive impact on chip manufacturers and other AI infrastructure providers, will serve as an important test of whether confidence in the sector is returning.

The Fed’s rhetoric remains a restraining factor. Yesterday, Anna Paulson, president of the Federal Reserve Bank of Philadelphia and a voting member of the FOMC, said that further gradual tightening of monetary policy was appropriate and left open the possibility of more aggressive steps in this direction if inflation expectations or wage pressures intensify. The bond market is closed today in observance of Veterans Day. No significant macroeconomic data or speeches by Fed officials are scheduled, so investors’ attention will focus on corporate news.

The key macroeconomic release of the week will be the Producer Price Index (PPI) on November 13. The consensus estimate for the core index is +0.3% MoM, while Freedom Broker forecasts a slowdown in its growth to 0.2% or lower.

Oil is rebounding from two-month lows: Brent is trading in the $92–92.5 per barrel range, while WTI is trading between $86.5 and $87. The day before, prices had fallen by more than $3 after U.S. Secretary of State Mark Rubio suggested that new military operations against Iran might not be necessary. Subsequently, prices partially recovered as Iran denied that negotiations were taking place. Ongoing attacks on ships in the Strait of Hormuz are providing support for oil prices.

After the market closes today, Corteva (CTVA) and Franco-Nevada (FNV) will report their earnings. Before the start of the main trading session on November 12, Nebius (NBIS)—CoreWeave’s main competitor among neo-cloud companies—will present its quarterly results.

S&P 500 and Nasdaq-100 futures are trading higher. We assess the risk-reward balance as moderately positive amid heightened volatility. Buyers are being supported by a strong report from CoreWeave and reduced positioning in tech stocks, but a reassessment of expectations regarding the Fed’s interest rate is dampening risk appetite.

— CoreWeave (CRWV) shares are rising nearly 16% on the back of a strong quarterly report. The company’s third-quarter revenue rose 168% year-over-year to $3.66 billion, exceeding the market’s average estimate of $3.55 billion. Adjusted operating income came in at $379 million, compared to the company’s own forecast of $200–260 million. The revenue guidance for 2026 has been raised from $12.4–13.2 billion to $13–13.3 billion, compared to a consensus estimate of $12.86 billion. The report confirms demand for computing power, but the focus remains on the terms of financing for growth. Following CRWV, shares of other companies in the sector are rising: Nebius (NBIS) is up nearly 11%, and IREN (IREN) is up about 7%.

— TSMC (TSM) shares are up more than 3.5%. The board of directors approved an investment of up to $500 million in Anthropic shares at the IPO price and an investment of up to $500 million in OpenAI preferred stock. Capital expenditures of approximately $40.9 billion have also been approved. These funds will primarily be directed toward expanding cutting-edge chip manufacturing and packaging capabilities. The decision strengthens the ties between the world’s largest contract semiconductor manufacturer and leading AI developers.

— Rigetti Computing (RGTI) shares are down about 3% following a weak quarterly report. The company’s revenue fell 28% year-over-year to $1.4 million, while adjusted loss per share was $0.06, compared to consensus estimates of $3.7 million and $0.05, respectively. The company’s own revenue forecast for 2026 is around $20 million, compared to the market’s average estimate of $22.9 million. Gaidens expects the client to accept the C-DAC system in the fourth quarter. The issuer’s results highlight the uneven pace of commercialization of quantum technologies.

Trading on November 10 on U.S. stock markets ended with declines. The S&P 500 fell 0.38%, the Nasdaq-100 dropped 0.6%, the Dow Jones lost 0.3%, and the Russell 2000 fell 0.68%. NVIDIA (NVDA: –5.5%) exerted the most pressure on the indices: reports of possible new restrictions on chip exports compounded the investigation involving its CEO. The number of advancing and declining stocks in the S&P 500 was roughly equal, and the equally weighted index performed better than the “classic” one. On the NYSE and Nasdaq, the ratio of declining to advancing stocks was 1.98:1 and 2.18:1, respectively. The financial sector emerged as the top performer, driven by insurers and exchange operators (XLF: +0.52%). The IT sector (XLK: –1.15%) lagged behind amid a sell-off in chipmakers, cloud companies, and software providers.

The main topic of the session was the bond market. The yield on two-year Treasuries jumped by 18 basis points—the largest increase since October 2024—to 4.74%; the yield on 10-year Treasuries rose by 12 basis points to 4.99%; while the yield on 30-year Treasuries rose by 9 basis points to 5.35%.

Even before the release of the October consumer inflation data, Federal Reserve Board member Christopher Waller suggested that a 50-basis-point rate hike in December was possible if the index rose more than expected. After the release of these figures, the market priced in a 100% probability of a 25-basis-point rate hike by year-end and approximately a 10% probability of a 50-basis-point hike. Lori Logan, president of the Federal Reserve Bank of Dallas, called for at least two 25-basis-point rate hikes, with the possibility of a subsequent pause. The auction of $42 billion in 10-year Treasury notes was lackluster.

The overall Consumer Price Index (CPI) rose 0.4% month-over-month in October, compared with a market consensus of 0.3% and a forecast of 0.2% from Freedom Broker analysts (September: 0.6%). The core index rose 0.3% MoM, compared with a consensus estimate of 0.2% and a similar forecast from Freedom Broker (September: 0.3%). The acceleration in CPI growth was driven by higher prices for medical services, auto insurance, and smartphones; housing prices rose at a slower pace.

Anthropic’s successes have put pressure on public companies in the AI sector. In its updated S-1 filing, the company confirmed an annual revenue run rate of more than $80 billion and plans to raise approximately $90 billion through its IPO. Microsoft (MSFT: –2.2%) shares fell following the announcement of Anthropic’s office AI tools, which compete with the company’s products. GE Vernova (GEV: –3.9%) fell after SoftBank reported a $3.7 billion loss on unsold energy equipment for data centers. Weak earnings reports weighed on the market outside the tech sector. Hims & Hers (HIMS: –16.6%) reported a decline in subscribers and lowered its 2026 EBITDA guidance. Bucking the trend, Aaon Group (AAON: +19.3%) rose after revising its revenue growth forecast for 2026 from 55–60% to 72–75%.

This article was AI-translated and verified by a human editor