CoreWeave dropped 5% after Burry closed his short without triggering a rally, and the bear case has since shifted from demand concerns to its 8.94 debt-to-equity ratio.
NVIDIA confirmed Vera Rubin racks in full production at CoreWeave and Oracle, with Jensen Huang declaring AI has reached its inflection point.
Cloudflare's asset-light model kept it nearly flat while leveraged peers sold off, posting 35.9% revenue growth without borrowing to build data-center capacity.
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Shares of CoreWeave (NASDAQ:CRWV) are down 5% to $90.27 midday Thursday, sliding even after Michael Burry, the investor known for The Big Short, closed his highest-profile bearish bet against the AI infrastructure complex. The move stands out because that kind of catalyst usually lifts a heavily shorted AI name. The failure to rally is itself the signal.
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Oracle (NYSE:ORCL) stock is down 3% to $157.43 heading into tonight's fiscal Q1 2027 earnings release. Meanwhile, Cloudflare (NYSE:NET) shares are trading steady, off just 0.2% to $313.57.
The cloud group is separating around balance-sheet risk today. The First Trust Cloud Computing ETF (NASDAQ:SKYY) is down 0.1%. For broader tech-sector context, the Invesco QQQ Trust (NASDAQ:QQQ) is off by 0.74%, so CRWV and ORCL are down more than the NASDAQ 100.
Burry Covers, and CoreWeave Still Slides
The Burry news was widely expected to lift AI-exposed names. NVIDIA (NASDAQ:NVDA) was the underlying, and the position was the market's most visible AI-related short. Through his firm Scion Asset Management, Burry closed his December put options on the chipmaker without rolling into later contracts, and he has said the exit shouldn't be read as optimism.
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CoreWeave Chief Executive Michael Intrator stated on Wednesday that the company's newer data-center deals carry more operating margin than earlier ones and that "the deal-level economics are excellent," because customers are paying more for AI compute faster than input costs are rising. The demand data supports him: CoreWeave's Q2 2026 revenue rose 112.3% year over year to $2.58 billion, with revenue backlog around $104 billion.
The bear case is a balance-sheet argument. 24/7 Wall St. calculates that CoreWeave carries a debt-to-equity ratio of 8.94, and interest expense reached $640 million in Q2 against free cash flow of -$5.74 billion after $6.42 billion in capex.
Supplier data still points to intense end demand. NVIDIA's most recent report placed Vera Rubin racks in full production at CoreWeave, Google Cloud, Microsoft (NASDAQ:MSFT) Azure, Oracle Cloud Infrastructure, and Nebius (NASDAQ:NBIS); CEO Jensen Huang stated that "AI has reached its inflection point" and that compute is revenue (we profiled seven of the picks-and-shovels suppliers powering that buildout, beyond the chipmakers, in a free report here).
Oracle Funding Question Meets Options Optimism
Oracle reports its fiscal Q1 2027 results after today's close. Julia Spina, Head of Research, North America at IG Group, noted that options are pricing in an 11% move, or $18 per share, around the report, and calls are trading richer than puts. That's the reverse of the usual pattern, with call premiums bid above puts into the print.
Funding is a major concern for Oracle. Guggenheim flagged that Oracle plans to raise $40 billion in fiscal 2027 for its AI buildout, its credit-default swaps have recently reached record highs, and analysts have pointed to financing risk, reported delays at some AI data-center sites, and heavy backlog concentration in a single AI lab.
Still, Oracle's demand backdrop is strong. The most recent quarter showed Cloud Infrastructure revenue up 93% year over year to $5.79 billion, and remaining performance obligations reached $638 billion, up 363% year over year. The question is whether that backlog gets financed cleanly enough to translate into margin expansion.
Furthermore, sentiment into the report leans constructive. Polymarket traders are pricing the "beat quarterly earnings" outcome at 0.79, and a composite Oracle sentiment score sits at 74.54 with a bullish direction. The financing question remains open after that read, though it does explain why the calls are bid.
Cloudflare Sits Out the Debate
Cloudflare stock rallied earlier this week on an OpenAI security partnership and is holding those gains today. It sells AI-adjacent services across an existing network rather than funding fresh data-center capacity with debt, which is why its stock is barely moving while the capital-heavy names sell off. Revenue in Cloudflare's most recent quarter accelerated to $696.06 million, up 35.9% year over year, and CEO Matthew Prince stated that "Cloudflare sits at the center of this paradigm shift" as web traffic moves to AI agents.
Guidance is also lifting. Cloudflare raised its FY2026 outlook to $2.864 billion to $2.87 billion in revenue and non-GAAP EPS of $1.25 to $1.26. The asset-light model separates it from the operators funding physical GPU capacity through debt markets.
What to Watch
Oracle's earnings release after the closing bell could set the tone for the AI infrastructure trade into Friday. Investors can watch for whether management addresses the $40 billion financing plan directly and how much of the backlog remains tied to a single customer, according to Guggenheim.
For CoreWeave, the read is starker. A stock that can't rally on its best-known bear covering and a CEO publicly defending deal economics is telling you the argument has moved from demand to the balance sheet, and one's position sizing should reflect that leverage.
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