CoreWeave (CRWV): A sudden surge after two days of breaking issue

As a highly anticipated "son stock" of $NVIDIA(NVDA.US) in the 2025 U.S. stock market, $Coreweave(CRWV.US) landed on NASDAQ last Friday at an issue price of $40. Despite being below the original range of $47-$55 and a reduced issuance volume, it still couldn't avoid breaking issue on its first day, with an intraday drop of over 6%. However, the company's stock price reversed on Tuesday, closing up 42% at $52.57, with its market cap surpassing $24.3 billion, showing a phased recovery of market confidence in its core computing assets.

This rebound was mainly driven by two catalytic factors:

First, the strategic endorsement effect from OpenAI. OpenAI announced on Monday the completion of a $40 billion financing round, valuing the company at $300 billion. Its $11.9 billion long-term computing power supply agreement with CoreWeave once again became a market focus. This order not only forms a stable foundation for the company's future revenue but also strengthens its industry positioning as a core AI infrastructure service provider. With expectations of OpenAI continuing to expand its computing investments, market concerns about CoreWeave's high-leverage expansion were temporarily alleviated.
Second, positive validation of industry demand. The better-than-expected earnings report (30% YoY revenue growth) from AI software company Progress (PRGS) during the same period indirectly confirmed that enterprise AI budgets are still growing. This signal directly countered the previous pessimistic expectations of a "decline in computing demand," driving capital back into the AI infrastructure sector.

From a business perspective, CoreWeave's core competitiveness lies in its large-scale operational capability for NVIDIA GPU resources. 60% of its revenue relies on major clients like Microsoft, and its computing power scale of 250,000 GPUs has built a significant industry barrier. Despite breaking issue initially due to factors like low risk asset preference under the Fed's rate hike cycle and short-term overvaluation of the AI sector, its "GPU as a service" business model and deep technical ties with NVIDIA (priority access to H200 chips) are still seen by institutions as core supports for long-term growth.

Newsmax (NMAX): 22x in 2 days, only the brave dare to enter

In stark contrast to CoreWeave's value recovery, the listing performance of conservative media company $Newsmax(NMAX.US) can be described as a "speculative frenzy." This new stock, issued at a low price of $10 with only $75 million raised, surged 2230% cumulatively over two trading days, with its market cap soaring to $29.92 billion, surpassing legacy media group Fox and becoming the most extreme case of sentiment-driven trading in the recent U.S. stock market.

The driving logic behind this rally shows clear irrational characteristics:

First, the float structure and capital game dynamics. Its low issue price and small market cap naturally made it an ideal target for short-term capital. The 735% surge on the first day attracted a large number of retail investors to follow the trend, with FOMO (fear of missing out) sentiment spreading rapidly through social media, forming a "price-emotion" positive feedback loop.
Second, the premium effect of political attributes. As a core conservative media platform in the U.S., Newsmax is deeply tied to the Trump political ecosystem. Its content positioning forms strong cultural identification with right-wing voters, with some capital viewing it as a "political stance investment," assigning it an emotional premium beyond commercial value. The close relationship between founder Christopher Ruddy and Trump, as well as the company's media influence in the Republican camp, further strengthens this attribute.
Finally, the severe disconnect between fundamentals and valuation. In 2023, the company's revenue was only $171 million with continued losses, and its current P/S ratio exceeds 85x, far surpassing the peak levels of historical meme stocks (like GameStop and AMC). Bloomberg data shows that new stocks with first-day gains exceeding 700% in the past five years saw an average subsequent pullback of 94%, highlighting the unsustainability of such extreme rallies.

Market implications: The divide between value investing and speculative bubbles

The divergent trends of CoreWeave and Newsmax essentially reflect the current U.S. stock market's differentiated pricing of "real performance-driven" and "sentiment-driven concept hype." The former, despite short-term fluctuations, relies on OpenAI orders, the NVIDIA ecosystem, and rigid computing demand, with its valuation recovery supported by industrial logic. The latter, however, depends entirely on float games and political topic heat, lacking fundamental anchoring, with highly concentrated bubble risks.

For investors, it's crucial to be wary of speculative hype during market theme vacuums, focusing on AI infrastructure leaders with clear performance realization capabilities, while maintaining caution toward extreme valuation deviations driven by sentiment. As the Fed's policy path becomes clearer, the market style may return to fundamentals, with companies' real profitability and cash flow quality becoming the core of pricing.