Micron and other AI stocks surge as CoreWeave calms Wall Street's worst fears

By Emily Bary

CoreWeave's improved AI economics and its vow to show some discipline around future debt are sparking a broad rally across the chip sector

Micron's stock is rising as part of a broad rally for the chip sector.

CoreWeave helped soothe the artificial-intelligence trade, as shares of key chip companies were up strongly on Wednesday.

Investors had come to view CoreWeave (CRWV) as an AI linchpin of sorts. While the neocloud company isn't the most well-known, its reliance on borrowed money spooked investors amid rising fears over a slower AI buildout and the tight financial ties between major players in the AI ecosystem.

But stocks in the "AI-levered complex" are moving sharply higher, noted Jefferies trading-desk analyst Jeffrey Favuzza, after CoreWeave calmed nerves on its earnings call. The company discussed its path to profitability, vowed to avoid a particularly risky type of debt, and outlined attractive cloud-computing economics in the current market. For instance, CoreWeave is seeing such high demand that it can charge even more than before for access to chips that are many years old.

The company also said it anticipates raising less than $5 billion in additional parent-level capital through the end of 2027, something Favuzza said is resonating with investors.

CoreWeave's stock is up 16% in premarket trading, while shares of fellow neocloud company Nebius Group (NBIS) are up 14%. Neoclouds rent out access to computing power from advanced chips.

Other big winners include optical stocks, with shares of Lumentum Holdings (LITE), Coherent (COHR) and Marvell Technology (MRVL) all up more than 9%. Sandisk's stock (SNDK) is up more than 8%, while Micron Technology's stock (MU) is up more than 6%. Even Nvidia's stock (NVDA) is getting some relief as it moves 4% higher in premarket action.

The iShares Semiconductor ETF SOXX is up 5%.

"The biggest question we just have is the magnitude of follow through where it currently feels like a really skittish tape," Favuzza said in his note to clients.

Another factor supporting the chip sector's rally is a Wall Street Journal report discussing OpenAI's financials. The report said that OpenAI is growing quickly, citing an approximately 50% growth rate between the second and third quarters that led to $10 billion in revenue. That said, the Wall Street Journal flagged a modest uptick in adjusted losses and noted that rival Anthropic is operating more efficiently.

OpenAI didn't immediately respond to a MarketWatch request for comment.

Investors have focused on the financials of privately held AI companies given their importance in sustaining demand for chips as well as questions about whether their hefty AI spending will deliver appropriate returns.

Don't miss: Anthropic officially sets the stage for an IPO valuing the company north of $1 trillion

-Emily Bary

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11-11-26 0837ET