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Cramer's Lightning Round: 'I'm going to have to take a pass on' Fluence

Cramer's Lightning Round: 'I'm going to have to take a pass on' Fluence

CNBC15-07-2025
Fluence: "It's losing a lot of money, it's down 50%. I'm going to have to take a pass on that name."
GE Vernova: "At this point, we're going to wait for GE Vernova to come in."
Nebius: "CoreWeave. Just buy CoreWeave, don't deviate."
Taiwan Semiconductor: "...I would rather just see what they report at this point."
Quantum Computing: "It's a money-losing company, and if we get rid of the fervor for the moment about quantum, you'll be buying that $17 stock at $7. And that's what I worry about the most."
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CoreWeave vs. Amazon: Which AI Infra Stock Has More Upside Right Now?
CoreWeave vs. Amazon: Which AI Infra Stock Has More Upside Right Now?

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time2 hours ago

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CoreWeave vs. Amazon: Which AI Infra Stock Has More Upside Right Now?

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Let's break down how each company is performing and which one looks like the better investment right now. CoreWeave: A Fast-Growing Pure-Play AI Infra Provider CoreWeave is well-positioned to gain from the AI infrastructure boom. In the last earnings call, management highlighted that AI is forecasted to have a global economic impact of $20 trillion by 2030, while the total addressable market is anticipated to increase to $400 billion by 2028. Strategic partnerships with major players like OpenAI and NVIDIA bode well, along with a massive $259 billion revenue backlog. Apart from a $11.9 billion deal with OpenAI, CRWV has added several new enterprise customers and a hyperscaler client. It has signed expansion agreements with many customers, including a $4 billion expansion with a big AI-enterprise customer. CRWV added that the $4 billion expansion agreement signed with a big AI client will be reflected in revenue backlog beginning in the second quarter. Apart from scaling capacity and getting adequate financing for infrastructure, CRWV is also expanding its go-to-market capabilities. Moreover, the buyout of the Weights and Biases acquisition has added 1,400 AI labs and enterprises as clients for CoreWeave. The stock has declined sharply post its announcement of $9 billion takeover of Core Scientific. Since the announcement on July 7, CRWV has lost nearly 25%. Apart from scrutiny surrounding the company's latest acquisition bid, it also faces other headwinds. CRWV's aggressive capital deployment strategy is a key concern. CRWV expects capex to be between $20 billion and $23 billion for 2025 due to accelerated investment in the platform to meet customer demand. High capex, even with a success-based model, exposes CoreWeave to execution risks if contract revenue does not materialize on time. CoreWeave's aggressive data center buildout is being funded in part by debt, leading to ballooning interest expenses, which can exert pressure on the adjusted net income and potentially affect free cash flow generation. Stiff competition from the likes of AWS and Azure, and intense customer concentration risk remain concerning. CoreWeave's 77% of total revenues in 2024 came from the top two customers. Amazon: Aggressive Expansion AWS is the market leader in the cloud compute space and is now aggressively moving into AI infrastructure. To stay ahead of rivals, Amazon has launched custom AI chips (Trainium and Inferentia) and strengthened partnerships with the likes of NVIDIA while forging new collaborations with other AI developers to train and deploy models on AWS. AWS revenues surged 17% year over year in the first quarter of 2025, with an annualized revenue run rate pegged at $117 billion. AWS backlog reached $189 billion with a 4.1-year weighted average life, offering forward revenue visibility. In the last reported quarter, AWS signed new agreements with major companies, including Ericsson, Adobe, Uber Technologies, Nasdaq, Fujitsu and many others. Amazon highlighted that more than 85% of global IT spending is still on-premises, suggesting immense growth potential for AWS. Its increasing investments in generative AI are likely to continue aiding it in gaining momentum among cloud customers in the near term. More importantly, Amazon's AI business segment now operates at a multi-billion-dollar annual revenue run rate with triple-digit percentage growth year over year. Amazon's strategy focuses on custom silicon development, particularly its Trainium 2 chips, which offer 30-40% better price performance compared to GPU-based instances. The company has also expanded its AI model offerings through Amazon Bedrock and introduced services like Amazon Nova foundation models. AMZN has added the latest foundation models in Amazon Bedrock, including Anthropic's Claude 3.7 Sonnet, Meta's Llama 4 family of models, DeepSeek's R1 and Mistral AI's Pixtral Large. AMZN is ramping up investment to build its technology infrastructure, primarily related to AWS and for custom silicon like Trainium. Moreover, its diversified businesses and stupendous financial resources give it an edge. As of March 31, 2025, cash and cash equivalents were $66.2 billion, while operating cash flow generated in the first quarter stood at nearly $17 billion. However, capacity constraints pose a challenge. Amazon has indicated that AI demand currently outstrips available capacity, suggesting the company could drive higher revenues with additional infrastructure. The intense competition from Microsoft's Azure and Google Cloud is concerning. Heavy capex spend could strain margins if AI returns do not materialize. CRWV Shares vs. AMZN Over the past month, AMZN shares have gained 6.9% while CRWV stock has lost 24.1%. Image Source: Zacks Investment Research Valuation for CRWV & AMZN Valuation-wise, both Amazon and CoreWeave are overvalued, as suggested by the Value Score of D and F, respectively. Image Source: Zacks Investment Research In terms of Price/Book, CRWV shares are trading at 30.22X, lower than AMZN's 8.06X. How Do Zacks Estimates Compare for CRWV & AMZN? Analysts have kept their earnings estimates unchanged for CRWV's bottom line for the current year. Image Source: Zacks Investment Research For AMZN, there is a marginal upward revision. Image Source: Zacks Investment Research CRWV or AMZN: Which is a Better Pick? Amazon remains a more stable and diversified AI cloud/infra bet, with AWS as a high growth engine. AWS is well poised to benefit from AI demand at a massive scale, as it aggressively improves on specialization. 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A tricky earnings season has required two hands on the wheel, and it's not slowing down yet
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time3 hours ago

  • CNBC

A tricky earnings season has required two hands on the wheel, and it's not slowing down yet

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time4 hours ago

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