When NVIDIA Corp. (NVDA) delivers a blockbuster earnings report, it's not just the chipmaker's stock that benefits. On Wednesday, shares of CoreWeave, Inc. (CRWV) and Core Scientific, Inc. (CORZ) climbed in after-hours trading, riding what traders call a "pick-and-shovel" rally—the idea that when everyone's rushing to mine gold, the smart money invests in the companies selling shovels.
Nvidia has become the face of the AI revolution, and its third quarter results reassured investors that the AI trade remains very much alive. Wall Street had been looking for that reassurance after tech stocks hit a rough patch heading into the earnings announcement, and the AI chipmaker didn't disappoint.
"AI is going everywhere, doing everything, all at once," Nvidia CEO Jensen Huang said in the company's earnings release.
That optimism rippled through to CoreWeave, whose business model is tied directly to GPU availability as Nvidia's premier cloud partner. The earnings beat signals that the "AI factory" build-out is accelerating, which directly boosts CoreWeave's utilization rates. More demand for AI computing means more customers spinning up instances on CoreWeave's infrastructure.
Core Scientific also rallied, benefiting from the massive power and compute requirements that AI workloads demand. Here's where things get interesting: Core Scientific has existing contracts to host over 500 MW of compute capacity for CoreWeave, making it a prime beneficiary of Nvidia's success and effectively linking all three companies together in the AI supply chain.
In other words, when Nvidia wins, the companies providing the infrastructure to run those GPUs win too. That's the pick-and-shovel play in action.
