CoreWeave Jumps 25% and Drags the AI Trade Back to Life, Until Nvidia Spoiled the Night

After a hot inflation report knocked stocks around on Tuesday, Wednesday felt like a much-needed exhale for tech investors. The Nasdaq climbed 1.6% to 25,466, the S&P 500 rose 1.31% to 7,619, and the Dow added about half a percent to finish at 52,486. Bond markets were closed for Veterans Day, so all eyes stayed on stocks.

The hero of the day was CoreWeave, the cloud company that rents out Nvidia-powered computing to AI labs. Its shares closed up almost 25% after a quarter that blew past its own targets. Revenue came in around $3.66 billion, up roughly 168% from a year ago, and the company raised its full-year revenue forecast to $13 billion to $13.3 billion. It's still losing money, with a $709 million net loss in the quarter, but CEO Michael Intrator told CNBC that demand for its infrastructure "remains overwhelming." That was all chip stocks needed to hear. Coherent was up about 18% by midday. Apple also pushed to a new all-time high during the afternoon, briefly valued at about $5.16 trillion.

Then came the after-hours twist. The Wall Street Journal reported that Nvidia's board is preparing to remove CEO Jensen Huang over reports of two extramarital affairs, one of them with a direct report. Nvidia had actually closed up nearly 3% during the regular session. After the report, the stock fell more than 8% in late trading. Huang has run the company since 1993, and the CFO is seen as an early contender to replace him. Nvidia didn't immediately comment.

The mood on rates hasn't improved either. Traders now see about a 90% chance the Fed will raise rates in December, and Goldman Sachs expects hikes in both December and March.

So AI spending looks stronger than ever, yet the biggest AI company might be about to lose its founder.