6/30/25-CoreWeave+OpenAI, Gordon Ramsay👨🏻🍳, Susan Li, FOMC & Housing🏘️
Perfection is imaginary, but Excellence is often within our grasp.
Welcome back. In a busy world we can be distracted with the trivial many things or we can focus on The Vital Few.
Something that I am thinking about
My Thoughts Regarding CoreWeave
I finally took some time to read recent IPO CoreWeave’s financials and listen to the most recent earnings call. CoreWeave is a US based AI cloud-computing company providing high-performance, GPU-accelerated cloud infrastructure, primarily for artificial intelligence (AI) developers and enterprises. It distinguishes itself from larger, general-purpose cloud providers by focusing exclusively on the demanding compute needs of AI, machine learning, visual effects (VFX), and other compute-intensive workloads.
CoreWeave builds and operates its own data centers, which are purpose-built for GPU-intensive tasks, often featuring liquid cooling and optimized designs to handle the power and heat requirements of the latest NVIDIA GPUs like the H100 and Blackwell series.
Based on recent reports, a significant portion of CoreWeave's revenue comes from OpenAI, and this is expected to grow substantially.
OpenAI has an initial equity stake in CoreWeave worth approximately $350 million, but that investment has subsequently appreciated to ~$1B.
This investment is part of a larger agreement where OpenAI will pay CoreWeave up to $11.9 billion over five years for AI data centers and services.
OpenAI has also signed an additional deal with CoreWeave to provide cloud computing capacity worth up to $4 billion through April 2029.
The OpenAI contracts account for over ~60% of CoreWeave's backlog, indicating a significant future revenue stream.
I was impressed with the fact that CoreWeave has 33 of its own Data Centers in the US and Europe.
The companies growth is so concentrated with OpenAI and to a lesser degree Microsoft. The company is not for me right now, so I am going to pass. BUT, but, but….
The obvious no-brainer opportunity that I saw was for OpenAI to just buy 100% of CoreWeave. OpenAI has huge ambitions (and a decent amount of arrogance to go with it), they are going to need Data Centers to function and grow, so pay a premium for CoreWeave and set yourself up as a real competitor to Amazon, MSFT and GOOG. Moreover, if OpenAI continues to be successful, the price of CoreWeave is going to rise also. OpenAI should hold their nose and pay the high premium for 100% of CoreWeave. CRWV 0.00%↑ , MSFT 0.00%↑ , AMZN 0.00%↑ , GOOG 0.00%↑
Investing, Companies, Market Past/Future
(I invest in Companies, not in stocks.)
Interesting companies that hosted earnings results or information sessions since my last edition that I reviewed-
Technology- MU 0.00%↑
Housing / Banking - LEN 0.00%↑
Others- ACN 0.00%↑ , KMX 0.00%↑
(With data and charts it is not what you look at, it is what you see that matters.) Click on any of the images below to see a larger view.
Podcast
Gordon Ramsay | SmartLess- 6/9/2025
My family watches at least one season of Hells Kitchen each year and a few episodes of Kitchen Nightmares with Gordon Ramsey👨🏻🍳. This episode on SmartLess was excellent because they asked questions and got Gordon talking about his childhood and motivations. Perfection is imaginary, but Excellence is often within our grasp. Gordon often models excellence. Enjoy.
The link is here and you can also find the show on your favorite podcast platform.
Video
CFO Susan Li, 29 min
Susan Li of Meta is brilliant and I am a fan! She is the youngest chief financial officer of a Fortune 100 company and she joins John Collison to talk about capital allocation, managing investors, and how Mark Zuckerberg has changed over the 17 years of working together. META 0.00%↑
[Want to learn about another rockstar CFO, in my 3/2025 post I wrote about Alphabet President and CIO Ruth Porat. Link here.]
Books and Articles since my last edition
(Reading Great books is like a conversation with the finest minds of the past.- Descartes. If I get bored of a book I quit and move on.)
Superpower: One Man's Quest to Transform American Energy by Russell Gold Nonfiction, Business, Electricity
Ghost in the Wires: My Adventures as the World's Most Wanted Hacker by Kevin D. Mitnick Social engineering master☹️🤢. While other nerds were fumbling with password possibilities, this adept break-artist was penetrating the digital secrets of Sun Microsystems, Digital Equipment Corporation, Nokia, Motorola, Pacific Bell, and other mammoth enterprises.
Zero Day by Mark E. Russinovich Fiction, Hacking
Here is a link to many of the books I have read and my 1-5 star rating- Goodreads Books Read
Wild Card🃏
What two 0.25% FED Rate cuts mean to the Housing Market-
I find it increasingly more probable that we are going to get two 0.25% FED interest rate cuts between July and late October. I have been thinking about what this might mean to mortgage rates, the housing market and public home builders.
The FED sets rates at the front end (very short term) end of the curve [currently 4.5%]. 30 Year mortgage rates are generally pegged to the 10 year treasury bond at the back (long term) end of the curve. [4.3% 10 Year Rate + ~2.4% margin for 30 Year Mortgage= 6.7% currently]
If inflation continues to come in neutral to slightly down then as soon as July the FOMC is going to lower rates by 0.25% to 4.25%. Then in September or October they will lower it again by 0.25% to 4.00%.
My assumption is that the 10 year rate will come down, and thus the 30 year mortgage rate will also decrease. My guess is that the 10 year only decreases by 0.25% by the end of the year, say 10Y at 4%. That would approximate a 30Y mortgage of 4% + 2.4% = ~6.375- 6.5%.
What does this do to the housing market and public home builders? I don’t know exactly, but it is an improving statistic. A slightly lower 30Y fixed doesn’t make homes that much more affordable, but.. Markets are forward looking and they are also emotional. Markets tend to look 6 months or more into the future and attempt to impute that future result into the present. I think this sequence would be bullish for US public home builders. It might be sooner or later, but at some point I think it will become a trend. DHI 0.00%↑ , LEN 0.00%↑ , PHM 0.00%↑ , GRBK 0.00%↑ , TOL 0.00%↑
Moreover, remember that US residential home construction is significantly underbuilt for the present population. I will be keeping an eye on this situation.
If you liked this post from Nick, why not share it and subscribe?
Disclaimer: All of my posts are for informational purposes only. I might own some of the companies discussed in these posts. This is NOT a recommendation to buy or sell securities discussed. Please do your own work before investing your money.