Neocloud stocks steadied Wednesday after Space Exploration Technologies Corp. (NASDAQ:SPCX) delivered a third-quarter report packed with evidence of strong demand for AI compute. Deepwater Asset Management managing partner Gene Munster read the results as a positive signal for the rest of the group.
- IREN stock is climbing. See the real-time price action here.
Munster: Compute Glut Fears ‘Off Base’
In a post on X, Munster said SpaceX posted “solid beats across the board,” calling the print “good news for neoclouds.”
He singled out the Super Intelligence (SI) segment, the compute business SpaceX rents out to customers. By Munster’s count, the segment beat expectations by 17%.
“This is profitable revenue and a sign that the narrative that we have oversupply of compute is off base,” Munster wrote.
The mix is shifting fast. Munster noted SI accounted for 52% of SpaceX revenue in the September quarter, up from 33% in the June quarter. Against total quarterly sales of about $14.6 billion, the share works out to roughly $7.6 billion from compute alone.
SpaceX Tops Estimates
SpaceX reported third-quarter revenue of $14.6 billion, up 161% from a year earlier and ahead of LSEG consensus estimates of $12.72 billion. Guidance was stronger still, with the forecast for first-quarter 2027 revenue of $33 billion to $37 billion, well above the $22.2 billion analysts expected.
Truist Securities analysts echoed Munster’s view. They said compute commentary on the earnings call supported “continued pricing power and shorter payback periods” for AI cloud providers, and described the quarter as the first data point of earnings season to back the bull case for the group, per CNBC.
Neoclouds Come Off a Brutal Week
The bounce follows a steep selloff. On Oct. 14, debt yields for CoreWeave Inc. (NASDAQ:CRWV) hit new highs, and the stock plunged 15% after investor Chamath Palihapitiya posted a screengrab showing its bonds at a 15% yield. Nebius Group N.V. (NASDAQ:NBIS) and IREN Ltd. (NASDAQ:IREN) fell as much as 10% in the same session.
Many investors treat CoreWeave as a bellwether for the sector because of its heavy debt. Wednesday’s gains were uneven. Former bitcoin miners now hosting AI workloads led the move, while CoreWeave itself barely budged.
Neocloud Price Action
Shares as of 2:30 p.m. ET Wednesday, according to Benzinga Pro:
- IREN rose 5.5% to $28.07.
- Nebius gained 0.6% to $172.52.
- TeraWulf Inc. (NASDAQ:WULF) climbed 7.7% to $12.94.
- Applied Digital Corp. (NASDAQ:APLD) jumped 9.9% to $21.23.
- CoreWeave was nearly unchanged at $62.15.
- Cipher Digital Inc. (NASDAQ:CIFR) added 2.9% to $9.13.
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