The AI rally fizzles as CoreWeave, AMD and other stocks cede Nvidia-fueled gains

By Christine Ji

Nvidia's third-quarter earnings beat initially alleviate AI-bubble fears, but tech stocks slip as markets digest economic data

Nvidia's upbeat view of the opportunity in AI bodes well for AMD, led by Lisa Su. But AMD shares reversed course on Thursday, along with Nvidia's stock.

Nvidia Corp.'s third-quarter earnings report came with high stakes for not only the chip maker itself, but also the entire artificial-intelligence ecosystem built upon its products.

However, an earnings beat apparently wasn't sufficient to power a lasting tech-stock turnaround Thursday, as several AI names shed their initial morning gains by the afternoon.

The sudden stock-market reversal Thursday came as investors absorbed Nvidia (NVDA) earnings and delayed September jobs data. A stronger-than-expected jobs report lowered the probability of a December interest-rate cut by the Federal Reserve, sparking concerns that higher borrowing costs would disproportionately suppress the valuations of high-growth tech stocks. The tech-heavy Nasdaq Composite COMP fell 2.2% on Thursday, while shares of Nvidia slid 3.2%.

Initially, Nvidia's record data-center revenue gave a lift to prominent AI-infrastructure names across the market on Thursday morning. CoreWeave Inc. (CRWV) and other AI cloud providers such as IREN Ltd. (IREN) and Nebius Group N.V. (NBIS) were prominent winners. Shares of CoreWeave and IREN rose 10% at the open, and Nebius's stock gained 7%.

On the company's earnings call, Nvidia Chief Executive Jensen Huang said "Blackwell sales are off the charts, and cloud GPUs are sold out." For CoreWeave, the largest neocloud company and a strategic partner to Nvidia, the bullish outlook provided reassurance to investors that it would have no trouble selling its data-center capacity.

However, CoreWeave's stock subsequently wiped out its morning gains, dropping to a 7.6% loss by the end of trading. Nebius's stock tumbled 11%, while IREN's declined 5%.

Don't miss: The five biggest Nvidia highlights that are helping soothe the stock market

Huang painted an extremely bullish picture of the AI market, affirming a total addressable market between $3 trillion and $4 trillion for AI infrastructure by 2030. This long-term outlook provided a powerful signal that there is ample opportunity for other chip providers such as Advanced Micro Devices Inc. (AMD).

However, the midday session saw the initial investor enthusiasm from the earnings call evaporate. AMD's stock rose 4% before flipping to a nearly 8% loss on the day.

Shares of memory and storage companies, a high-flying corner of the AI-infrastructure trade this year, ceded much of their early advance. While Nvidia's accelerating sales point to an ongoing need for high-capacity drives that can store immense amounts of data, shares of Western Digital Corp. (WDC) and Seagate Technology Holdings PLC (STX) fell 9% and 7%, respectively, after initially gaining 4% and 2% on Thursday.

Nvidia's networking revenues - which rose 162% year over year, as the company ramped up the deployment of its high-performance interconnect technology - highlighted a booming area of the AI trade. Yet shares of networking leader Arista Networks Inc. (ANET), which had spiked 5% earlier Thursday, fell 4%.

Beyond AI infrastructure companies, Palantir Technologies Inc. (PLTR) and Meta Platforms Inc. (META) also received an initial boost to their stock prices of 5% and 2% on Thursday morning, marking a temporary reversal from their recent declines amid the tech-sector selloff.

Both companies had received mentions from Nvidia on its earnings call. Palantir recently announced a partnership with Nvidia to integrate accelerated computing into its Ontology product, while Meta has built a generative-AI advertising model on Nvidia infrastructure.

However, shares of Meta and Palantir soon resumed their downward trend. Meta's stock ended down 0.2% and Palantir's stock dropped about 6%.

Read: 10 stocks that let you invest like Nvidia in the next hot AI trade

-Christine Ji

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11-20-25 1830ET