The artificial intelligence sector is bracing for a pivotal week as several key infrastructure companies, including Cisco, CoreWeave, and Nebius, are set to release their latest quarterly earnings reports. These results will offer a critical look into the sustainability of the AI spending boom and test investor confidence amid a volatile stock market.
While demand for AI hardware and cloud services remains high, investors will be closely watching for signs of slowing growth, margin pressures, and future guidance. The performance of these companies is seen as a barometer for the health of the entire AI ecosystem, from chipmakers to software developers.
Key Takeaways
- Major AI infrastructure companies including Cisco, CoreWeave, and Nebius are reporting quarterly earnings this week.
- Investors are focused on whether the rapid growth in AI spending can be sustained.
- Cisco faces scrutiny over slowing revenue growth despite securing over $2 billion in AI-related orders.
- High-growth firms CoreWeave and Nebius are expected to post triple-digit revenue increases, but profitability remains a long-term goal.
- The reports come as the broader stock market shows signs of instability, increasing pressure on companies to deliver strong results.
Cisco's AI Ambitions Under the Microscope
Networking giant Cisco Systems is scheduled to report its quarterly results on Wednesday, and the stakes are high. The company's stock has recently faced downward pressure, slipping below key technical levels after a promising breakout in late October.
In its previous fiscal quarter, Cisco reported an 8% increase in revenue to $14.7 billion. While positive, this represented a slowdown from the 11% growth seen in the prior quarter, raising questions about its growth trajectory. The consensus estimate for the upcoming report is an 8% rise in adjusted profit to 98 cents per share on revenue of $14.8 billion, a 7% year-over-year increase.
Cisco's AI Order Book
Despite concerns over its core business growth, Cisco has made significant inroads into the AI market. The company secured more than $800 million in AI infrastructure orders from large-scale web customers in the quarter ending in July. For the full fiscal year, AI-related orders surpassed $2 billion, doubling its initial target.
Cisco's strategy hinges on partnerships with major players like Nvidia and Microsoft, as well as international firms such as G42 in Abu Dhabi and Humain in Saudi Arabia. These collaborations are designed to position Cisco as a crucial supplier for the buildout of new AI data centers. Investors will be listening for updates on these partnerships and whether the strong AI order momentum has continued.
The High-Growth GPU Providers
Two of the fastest-growing players in the AI infrastructure space, CoreWeave and Nebius, are also on the earnings calendar. Both companies specialize in providing the graphics processing units (GPUs) essential for training and running complex AI models. Their results are a direct indicator of the voracious appetite for AI computing power.
CoreWeave's Explosive Expansion
CoreWeave, which reports on Monday, has established itself as a key provider of GPU-accelerated infrastructure. The company allows businesses to access massive computing power without the immense cost of building their own data centers.
While CoreWeave is not yet profitable, its revenue growth has been extraordinary. In the second quarter, revenue surged 207% to over $1.2 billion. For the third quarter, analysts expect that figure to climb even higher, forecasting a 231% jump to nearly $1.29 billion.
Nebius Leverages Strategic Partnerships
Netherlands-based Nebius, which was spun off from the Russian internet company Yandex in 2023, reports on Tuesday. The company's stock saw a massive 49% surge on September 9 after it announced a landmark deal with Microsoft.
The Microsoft Deal
The agreement with Microsoft, worth up to $19.4 billion, involves Nebius providing cloud computing power specifically for AI workloads. This partnership validates Nebius's position in the high-stakes GPU market and provides a substantial, long-term revenue stream.
Similar to CoreWeave, Nebius is prioritizing growth over immediate profit. Its second-quarter revenue exploded by 322% to $105.1 million. Wall Street anticipates continued, albeit slightly moderated, growth in the third quarter, with revenue projected to rise 258% to $155.1 million.
Broader Tech Sector in Focus
Beyond the dedicated AI cloud providers, other critical technology sectors are also reporting. The semiconductor industry, which provides the foundational hardware for AI, remains a key area of interest.
Applied Materials Faces Headwinds
Applied Materials, a leading manufacturer of semiconductor equipment, is set to release its results on November 13. The company's stock has shown resilience, but its last earnings report was accompanied by weak guidance for the October-ended quarter. Management cited demand pressures from China as a significant factor.
Analysts are projecting a challenging quarter for the company. The consensus forecast is for adjusted profit to decline 9% year-over-year to $2.11 per share, with revenue expected to fall 5% to $6.68 billion. The results will provide insight into the health of the global chip manufacturing industry.
Oklo's Nuclear Ambitions
Also reporting on Tuesday is Oklo, a company developing small-scale nuclear power plants. Oklo aims to provide clean, reliable energy for power-hungry data centers, a growing concern as the AI industry expands. The company is also working on recycling used nuclear fuel.
Oklo is not yet generating revenue, making it a more speculative investment. However, it has attracted significant institutional interest. According to reports, the number of investment funds holding Oklo stock has nearly tripled in the past year, growing from 132 at the end of last year to approximately 360 by the end of September. This indicates a strong belief among some institutional investors in the long-term potential of advanced nuclear energy to power the future of technology.