Stock Market Today, Oct. 28: CoreWeave Surges on Denmark AI Capacity Going Live

Microsoft's Q1 capital expenditure of $45.2 billion was below estimates due to delays in third-party cloud capacity. Neocloud stocks like CoreWeave, Nebius, Iren, and Applied Digital fell. Microsoft expects higher CapEx in Q2 and a total of $170 billion for the year. Alphabet also reported lower-than-expected CapEx. Iren raised $363 million through debt financing.

Nvidia (NVDA) invested $3 billion in Meta Platforms (META) as part of a broader strategy to fund AI ecosystem growth. Nvidia's equity investments surged to $42.4 billion in H1 2027, up 30-fold from the prior year. The company aims to expand growth opportunities and strengthen its competitive position. Nvidia's net income for the latest quarter was $59.7 billion, with $96.2 billion in revenue. Other investments include CoreWeave (CRWV), Nebius Group (NBIS), Lumentum (LITE), and Coherent (COHR).

The Federal Reserve held interest rates steady at 3.75%-4% in a 10-2 vote, with two members dissenting. The decision had minimal market impact, and Fed Chair Kevin Warsh hinted at future rate hikes. AI infrastructure stocks, particularly CoreWeave (CRWV), reacted positively, with CRWV rising 5.6%. The Fed's stance on rates remains crucial for tech and growth stocks, especially those sensitive to borrowing costs.

Global bond issuance reached $6.61 trillion, up 15% year-over-year, driven by AI infrastructure spending. Amazon became the fourth-largest issuer, with tech companies dominating bond markets. Cloud and data center issuance surged to $368 billion, raising concerns about supply absorption and higher yields. Investors demand more compensation amid rising financing costs and geopolitical tensions.

CoreWeave (CRWV) rose 7.32% to $63.93 on Wednesday after launching new AI capacity in Denmark, but slipped post-market following Microsoft's lower-than-expected capex. Microsoft, a major CoreWeave customer, reported $45.2B in capex, missing estimates of $50.7B. CoreWeave's backlog stands at $104B, but its debt exceeds $35B, raising funding concerns. The broader market saw gains, with the S&P 500 and Nasdaq up 0.32% and 0.27%, respectively.

CoreWeave and Nebius shares dropped 5% in extended trading after Microsoft's capex of $45.2B missed estimates, raising concerns about neocloud infrastructure demand. Microsoft's Azure revenue grew 48%, but lower capex suggests slower data center expansion. Alphabet also missed capex expectations. Analysts predict 80% of neocloud companies may fail by 2030. CoreWeave had gained 18% before the drop, closing at $63.93.