Sometimes the best opportunities come when everyone else is heading for the exits. That's the bet Brad Gerstner is making on a cloud infrastructure company that's lost half its value in six months.
Buying the Dip on a Nvidia Partner
Gerstner, who runs hedge fund Altimeter Capital, told CNBC's Halftime Report that he's been adding shares of CoreWeave Inc. (CRWV) as the stock has tumbled. His firm was an early investor when CoreWeave was still private, stayed with it through its 2025 IPO, and now he's leaning in while others are backing away.
Why CoreWeave specifically? Gerstner made it clear his firm isn't just buying every beaten-down neocloud stock out there. "We think CoreWeave stands alone," he said, pointing to the company's execution, performance, and crucially, its strategic relationship with Nvidia Corporation (NVDA). The company is positioned to benefit from Nvidia's upcoming Rubin platform, which apparently matters quite a bit if you're building AI infrastructure.
"It makes a really interesting opportunity," Gerstner noted, explaining that the stock "has fallen out of favor" and now offers upside potential even if CoreWeave simply hits expected numbers. No heroics required, just meet expectations and the market might remember why it got excited in the first place.
The Super Cycle Story
Here's where things get interesting. Gerstner believes we're still in the "early innings of a super cycle" for cloud and software companies riding the AI wave. And he's not just throwing around buzzwords. He's got receipts.
According to Gerstner, companies spent $150 billion on data center capital expenditures in 2023. That figure could hit $500 billion by 2026. "That's not speculative, that's purchase orders," he emphasized. Real money, real commitments, already in the pipeline.
It helps that Gerstner hosts a podcast and has had extended conversations with Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman. Those aren't your typical surface-level interviews. They likely give him insights into where the AI spending is actually flowing and which companies are positioned to capture it.
Reading the Price Action
CoreWeave traded at $77.18 on Wednesday, down 0.9% for the day. The stock has bounced around a 52-week range of $33.52 to $187.00, and yes, that six-month decline of 50.6% looks ugly. But zoom out a bit: shares are still up over 97% from the company's March IPO price of $40.
Whether Gerstner's timing proves prescient remains to be seen. He's betting that CoreWeave's connection to Nvidia and the broader data center buildout will matter more than whatever short-term concerns have hammered the stock. Given his track record and his access to industry leaders, it's at least worth paying attention to where he's putting his money.