CoreWeave Stock Sank 11% After Mark Zuckerberg's Meta Unveiled a Cloud Business Plan
Yahoo Finance ·
On July 1, several media outlets reported that Meta Platforms ( META +5.97% ) was forming a new business unit, internally dubbed "Meta Compute", to sell its excess AI cloud capacity to third-party customers. Meta will reportedly sell both its raw GPU computing capacity and remote access to its infrastructure to companies so they can run their own AI models. Shares of CoreWeave ( CRWV 0.87% ) , a leading neocloud provider that provides many of the same services, have dropped nearly 11% since that news broke. Does that pullback represent a buying opportunity or a dire warning for the company's future? Meta's strategic shift surprised CoreWeave's investors, since Meta had just agreed to pay CoreWeave $21 billion through 2032 for its neocloud services this April. Meta also struck a similar multi-billion dollar deal with another neocloud company, Nebius ( NBIS +1.50% ) . Therefore, it might initially seem odd for Meta to sell its own cloud computing power when it clearly needs it. Meta's agreements with CoreWeave and Nebius also prohibit it from reselling any of that cloud computing power, so it can only sell the excess AI cloud capacity at its own first-party data centers.
DYAX Investor Sentiment
Bullish (Long) 44% · Bearish (Short) 56%
378 participants
Related News
- Crypto Industry Steps Up Quantum Security Efforts as Encryption Risks Accelerate
- Jim Cramer Remains Upbeat About Meta Platforms (META)
- Broadcom Inc. (AVGO) Is Going To Come Back, Says Jim Cramer
- Jim Cramer Reveals Reason Behind Amazon.com, Inc. (AMZN)’s Share Price Movement
- Jim Cramer Was Left Perplexed By NVIDIA Corp. (NVDA)’s Shares
- MGM is reportedly in deal talks with Barry Diller’s People