Analysts Mixed After CRWV Posts Strong Earnings & $104B Backlog

anywhere free on Schwab network.com. Rebecca. Morning trade Live. Let's focus on some neo cloud stocks this morning. We are rallying and some of them in double digits. The ones that have reported obviously core weave is up 18%. And that is significant given the reaction we've seen over the last five quarters to its earnings, which have been negative. This is a positive response from the street. So we're going to unpack exactly why nebulous also rallying 20% right now. But let's get to core weave and this reaction to its latest earnings report because that is the focus of the morning trade. Joining us for a closer look at this is Alex Coffee. As I mentioned. I mean this has suffered a negative price reaction off the back of its five last quarters here. Alex I'm just wondering exactly what made the street respond the way it has this time around. Because I'm looking at pricing power. I'm looking at this word clean execution backlog, the beaten rays. Could you just sort of unpack exactly what we're seeing here? Yeah, I think, Sam, it's about what this company is on its way to potentially becoming. Because if this was the end of the story, I'm not sure this would have been enough. And the reason I say that is, well, it's still losing a fair amount of money per share. It reported $1.14. Now, that was better than the expected loss of $1.41 as far as revenue close to 2.6 billion, which slightly inched above the street. Consensus adjusted EBITDA was better than expected. The margins are improving, so you really have a story of improving profitability metrics and stronger than expected margins, which means that they're on their way to their ultimate destination, which is achieving scale for this business model, perhaps a little bit faster than expected. But you mentioned it to me, this is a backlog story, and it's a company that has talked a lot about just building things that their customers need. It's not necessarily just scaling up for the sake of scaling up. And they have approximately $104 billion in their backlog. But that's as of the end of June 30th. That didn't include the new 25 plus billion in commitments that they got in new commitments in this current quarter. So once those sort of headlines were parsed out, I really think that's when you saw this company go from a slightly negative reaction after hours when we were breaking these reports, this report to a pretty firmly positive one. Analysts, though surprisingly, Sam, we're a little bit more mixed. Vital knowledge said that the results were just blah to quote them. Looking at Barclays, they called it healthy, but they're equal weight with a price target of 90. JP Morgan is neutral, but they did move their price target up to 120. They said that they delivered on the key the key metrics, and they thought that the most important takeaway was an increased confidence in the company's long term outlook. And then a couple of the more bullish analysts, notably Citi. They said they delivered a confident message and that investor concerns around NIO cloud demand were were going to be basically quelled. And I would say that the Street reaction in terms of stock price also echoes that stock was up over 20% earlier. It's up about 18.5% now here in real time. Sam. But you combine that with the nebulous earnings and the nebulous message. All in all, pretty good day for these NIO cloud stocks, right? I'm sure Bly is a very high tech sort of financial term as well. But yeah, I mean, obviously a very nice reaction off the back of this. Let's see how long it lasts. Really appreciate the details, Alex. Let's trade this name with Scott Bauer, now CEO of Prosper Training Academy. Good morning to you, Scott. How would you approach an example trade for this one. Yeah. You know Alex made excuse me a lot of great points there. And you know I look at it as a quote great report because their losses narrowed. They have a huge backlog. However, if we look technically at this stock here, it did blow through both the 50 and the 200 day moving averages. But there is a clear pattern over the last several months of lower lows and lower highs. And we are just approaching, you know, this. 116117 area here that would be the next lower high. So I'm looking at that. I'm taking a very short term look at core weave here. And I'm going to sell a call spread for next week. I'm going to sell the 110 115 call spread here. And that's I'm going to get a $1.75 credit for that. So, you know, there is a little bit of risk to that. You know, that spread could go to $5. But I really like the, the pattern that has set up of these lower lows and lower highs. All right. Obviously getting a nice pop today on this one. We're seeing a nice rally across chips as well. In fact technology seems to be carrying us higher. We've only got three sectors in the green right now. What do you make of these markets. Got off the back of the CPI. Yeah I think that is CPI coming in you know in line nothing nothing out of the ordinary. That's what the market wanted right. The market does not like surprises. So the fact that it came in in line, the the current mode of trade, which has been okay, maybe the Fed's not going to lower rates or excuse me, not raise rates next month. That has certainly helped the tech space here. And we're seeing that continue today. All right. Really appreciate it. As always. Thank