CoreWeave and Nebius Group, two specialized AI cloud infrastructure providers, saw their shares jump sharply after reporting quarterly earnings this week, with CoreWeave rising nearly 20% and Nebius soaring 34%. Zacks Investment Research highlights five reasons the rally may continue, including Nebius's 454% year-over-year revenue growth and CoreWeave's $104 billion backlog, which is nearly double its market cap. The firm also notes that CoreWeave's earnings call debunked the bear thesis on GPU useful life, saying NVIDIA A100 chips now have a lifespan of at least nine years, and that both companies are first in line to deploy NVIDIA's next-generation Vera Rubin architecture. Profit margins are expanding, with Q2 contracts showing 5-10% higher margins than prior quarters, and heavy post-earnings volume suggests institutional accumulation that could force short sellers to cover.
