AI-linked stocks bounced higher after cloud-computing company CoreWeave said it expects to turn a profit in 2028. The forecast helped ease worries that AI infrastructure demand may not be strong enough to justify the enormous debt and capital spending behind the current data-center boom.
CoreWeave shares rose 23%, while the technology sector drove broader market gains. The Nasdaq rose 1.66%, the S&P 500 gained 1.12%, and the S&P 500 technology sector climbed 2.9%. Nvidia also recovered about 4% after recent losses.
The importance of CoreWeave’s update goes beyond one company. It has become a closely watched symbol of the AI-infrastructure business model: borrowing heavily to buy advanced chips and build capacity, then leasing that computing power to companies training and running AI systems.
Investors have recently become more skeptical about whether AI demand can keep pace with the billions being spent on chips, data centers, power generation, cooling, and networking. The concern is not that AI lacks potential. It is whether the companies financing the physical infrastructure can generate profits before high interest rates, regulation, or slower demand create pressure.
CoreWeave’s 2028 profitability target gave the market a more concrete milestone to evaluate. It does not remove risk, but it offers investors a clearer path from massive spending to eventual returns.
Markets are also weighing inflation and interest-rate expectations. Hotter-than-expected U.S. inflation has increased expectations for further Federal Reserve tightening, which can make capital-intensive AI infrastructure more expensive to finance. At the same time, political and regulatory scrutiny of data centers remains a factor.
The takeaway for startups is simple: the market is still excited about AI, but it increasingly wants numbers, not just narratives. Companies that can show revenue, customer demand, disciplined infrastructure spending, and credible unit economics will have a stronger case than those relying solely on future promises.