Connecting the CoreWeave and Lumentum Dots to Multiple Portfolio Holdings

On Tuesday night, CoreWeave CRWV and Lumentum LITE reported their quarterly results, and while the stocks of those two companies are mixed, what we saw in both of their results and updated guidance supports our positions in Nvidia NVDA and Marvell MRVL.

After Wednesday's market close, Cisco CSCO is on deck in that report we’ll be looking for not only the pull-through of AI adoption and data center demand on networking equipment, given our position in Marvell, but also comments about AI on cybersecurity demand. Behind Broadcom AVGO, Cisco shares are the second-largest holding in the First Trust Nasdaq Cybersecurity ETF CIBR.

CoreWeave Insights, Comments on Nvidia and SuRo Capital Shares

CoreWeave shares are under pressure on Wednesday morning despite besting June quarter revenue expectations and lifting its top-line expectations for the current quarter and for 2025. For the full year, CoreWeave now pegs its revenue between $5.15 billion and $5.35 billion versus the $5.05 billion consensus and its prior guidance of $4.90 billion to $5.10 billion. What’s weighing on CRWV shares is the June quarter EPS miss, but given our position in Nvidia, we’re more concerned with CoreWeave’s capex.

During the June quarter, CoreWeave’s capex spend was $2.9 billion, up $1 billion sequentially as it continued to scale to meet rising customer demand. Remember, Microsoft MSFT is a key customer and Alphabet GOOGL is a growing one for CoreWeave. Both of those companies signaled higher capital spending in the coming quarters given the customer demand, so it’s not surprising that CoreWeave would up its capex for the current quarter to $2.9 billion to $3.4 billion. For 2025, management targets $20 billion to $23 billion, which implies a significant ramp in December quarter capex to between $12 billion to $15 billion. That supports the outlook for a strong second half for Nvidia as well as Eaton ETN.

Given the pressure on CoreWeave shares on Wednesday morning, we are likely to see SSSS move lower as well. We also have CoreWeave’s lockup expiration coming sooner than usual. Typically, the lockup period for an IPO expires 180 days after the transaction is priced, which would be around September 24. However, CoreWeave’s lock-up period expires on Friday, August 15, and it will free up around 83% of the shares.

Even after Wednesday's move lower in CRWV shares, given the size of the move in CRWV shares from their IPO, that priced at $40, odds are there will be some additional pressure on the shares come Friday. If that is what we see, it has the strong possibility of pulling SSSS shares lower as well. For us, that could bring an opportunity late this week or early next week to nab some additional SSSS shares, boosting our exposure to the forthcoming dividend stream for this total return Portfolio play.

Lumentum Showcases Strong Cloud, Networking Demand

In Tuesday's video, we shared that we would be paying attention to demand comments from Lumentum, given the use of its optical components in the data center end market. The company delivered a beat-and-raise June quarter, noting the upside to its raised guidance in early June was due to demand strength for its Cloud & Networking segment, fueled by AI infrastructure demand. Segment revenue climbed 67% on a year-over-year basis and 16% sequentially. That strength is expected to continue in 2H 2025, with Lumentum guiding overall revenue for the current quarter to $510 million to $540 million compared to $481 million in the June quarter and $337 million in the year-ago quarter.

We see that strength supporting the Portfolio’s position in MRVL shares, while its comments about AI and data center do the same for NVDA shares.

Investor Conferences

Tuesday was the Oppenheimer 28th Annual Technology, Internet & Communications Conference, and on Wednesday we have JPMorgan’s Hardware Semi, and Management Access Forum.

During its presentation at the Oppenheimer conference, management from Universal Display OLED discussed its blue solution in more detail, indicating interest across multiple device categories, including smartphones, tablets and other displays. On the topic of foldable smartphones, one we’ve been following rather closely, management commented about the larger opportunity, given the needed volume of its red, green and eventually blue materials is two to three times the volume of a standard smartphone.

The reason gets back to one of the key points we’ve discussed when thinking about demand for Universal’s solutions — not to take you back to high school geometry, but the total area of foldable displays, depending on the model, is two to three times the size of a conventional smartphone. The same thinking applies to the tablet, PC and other markets that have much larger display sizes compared to a conventional smartphone. While we may be accused of beating a dead horse on this, that is the opportunity we aim to capture with OLED shares.

We’ll continue to mine other company presentations today and share other data points and signals as they relate to the Portfolio’s holdings and related areas with you.

Portfolio Thoughts

On Tuesday, we shared that we are closely tracking the shares of Axon AXON, ServiceNow NOW and SuRo Capital with an eye to adding some additional shares to the Portfolio. That remains the case, and to that pair we can add shares of the First Trust Nasdaq Cybersecurity ETF.

A quick reminder: Portfolio comments will be less than usual today as I move one of my kids to grad school. We’ll be back to regular programming tomorrow (August 14).

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long NVDA, MRVL, CIBR, MSFT, GOOGL, ETN, SSSS, AXON and NOW.