Rosenblatt Securities **** yst Chris Brendler thinks the recent selloff in HPC-linked stocks was overdone, nodding his head to two former Bitcoin miners making the pivot into AI Galaxy Digital (NASDAQ: GLXY) and Cipher Digital (NASDAQ: CIFR).
GLXY had fallen 22% over the prior two weeks while CIFR dropped 13%, at time of the notes publication on July 2. As of press time, GLXY and CIFR are down on the day, trading hands at $25.14 and $20.98 respectively.
The selloff intensified after Bloomberg reported on July 1 that Meta Platforms was building a cloud operation aimed at outside customers, with AI compute capacity and models part of the plan. The move raised concern that Meta could become a competitor in the neocloud stack alongside its role as a customer. CoreWeave-linked names bore the brunt of the selling, with CoreWeave itself falling nearly 14% that day.
Brendler dismissed the fear. "We view this reaction as overdone," he wrote, adding that the firm does not view the Meta news "as a negative demand signal." He pointed to Rosenblatt colleague John McPeake's **** sment that the Meta story appeared company-specific, driven by the social media giant's need to justify large capital expenditure, with no indication of a shift in contracted demand.
AI and Bitcoin's daily show: Subscribe to the Blockspace Podcast here, on Apple, Spotify, or anywhere you listen to podcasts.
GLXY had fallen 22% over the prior two weeks while CIFR dropped 13%, at time of the notes publication on July 2. As of press time, GLXY and CIFR are down on the day, trading hands at $25.14 and $20.98 respectively.
The selloff intensified after Bloomberg reported on July 1 that Meta Platforms was building a cloud operation aimed at outside customers, with AI compute capacity and models part of the plan. The move raised concern that Meta could become a competitor in the neocloud stack alongside its role as a customer. CoreWeave-linked names bore the brunt of the selling, with CoreWeave itself falling nearly 14% that day.
Brendler dismissed the fear. "We view this reaction as overdone," he wrote, adding that the firm does not view the Meta news "as a negative demand signal." He pointed to Rosenblatt colleague John McPeake's **** sment that the Meta story appeared company-specific, driven by the social media giant's need to justify large capital expenditure, with no indication of a shift in contracted demand.
AI and Bitcoin's daily show: Subscribe to the Blockspace Podcast here, on Apple, Spotify, or anywhere you listen to podcasts.
3 months ago
