Wall Street stocks rallied on Wednesday as stronger-than-expected results from Coreweave revived enthusiasm for AI, helping Nvidia recover some of its recent losses despite mounting scrutiny of its chief executive.

The S&P 500 climbed one per cent in early trading, while the Nasdaq Composite jumped 1.5 per cent, putting US stocks on course to recover further ground following last week’s bruising AI sell-off. The Dow Jones Industrial Average gained around 96 points.

The rebound came despite fresh US inflation figures on Tuesday pushing the benchmark 10-year Treasury yield above five per cent, adding to concerns over the cost of financing the AI industry’s vast infrastructure expansion.

Shares in Nvidia-backed cloud computing firm Coreweave surged around 15 per cent at the opening bell after third-quarter revenue jumped 168 per cent to $3.66bn (£2.8bn), beating analysts’ forecasts.

The company, which provides computing power to AI developers including Anthropic, raised its full-year revenue forecast to between $13bn and $13.3bn. Its quarterly loss of $1.27 per share was also smaller than expected.

Chief executive Michael Intrator dubbed it a “breakout quarter”, with the company expecting around $9bn in customer prepayments and deposits over the next three months.

The results eased concerns about Coreweave’s finances after its shares fell more than 40 per cent over the past month amid questions over the debt funding its data centre expansion.

Coreweave had $35.6bn in debt at the end of June, while the cost of insuring its borrowing against default has risen sharply.

The company also maintained plans to spend between $37bn and $39bn on capital expenditure this year, despite growing political opposition to new data centres following last week’s US midterm elections.

Intrator said the company did not expect the changing political environment to disrupt its expansion plans, adding that Coreweave remained comfortable with its development pipeline.

Susannah Streeter, chief investment strategist at Wealth Club, said the results had “sparked an uptick in enthusiasm for AI-focused stocks”, although high debt levels and complex financing arrangements remained a concern.

The recovery spread to other AI infrastructure companies, including Nebius and Iren, as investors weighed strong customer demand against the cost of building new data centres.

The rally also lifted European technology stocks, with London’s FTSE 100 climbing 0.4 per cent.

Anthropic valuation climbs as Nvidia faces investigation

The rally came as bankers working on Anthropic’s initial public offering reportedly considered increasing its valuation to $1.5 trillion or more following strong demand from investors.

The Claude developer outlined plans on Tuesday to sell 825 million shares at between $70 and $78 each, potentially raising $64.4bn and valuing the company at around $1.4 trillion.

A further $26bn investment from technology companies including Google, Microsoft and Nvidia is planned alongside the flotation.

Nvidia is reportedly committing $10bn, highlighting the close financial ties between AI developers and the companies supplying their computing infrastructure.

Anthropic has disclosed nearly $900bn in future computing commitments, while rival OpenAI reportedly generated $10bn in third-quarter revenue, up almost 50 per cent on the previous quarter.

Meanwhile, Nvidia shares rose around five per cent in pre-market trading after losing approximately $430bn in market value over two sessions following revelations about chief executive Jensen Huang’s affair with a woman suspected of links to Chinese intelligence.

The chipmaker has appointed law firm Wachtell, Lipton, Rosen & Katz and former federal prosecutor Joon Kim to investigate whether company information or national security was compromised.

Nvidia has said it has no reason to believe confidential information was compromised.

The company also faces a proposed shareholder lawsuit, while Morgan Stanley removed it from its top stock picks on Wednesday.