Nvidia (NVDA) CEO Jensen Huang addressed the recent discord at key partner and fallen AI stock darling CoreWeave (CRWV) on Thursday, expressing optimism in the data center operator following a 15% rout on Wednesday and a smaller dip on Thursday morning.

"CoreWeave's strength is improving every day," Huang shared at a Bloomberg event in Stockholm. "I'm optimistic. Their cost of capital is actually decreasing." His input was much anticipated this week as concerns about the health of CoreWeave and its exposures to Nvidia have continued to build.

Huang's need to weigh in wasn't a surprise to veteran tech analyst Tal Liani, who just this morning published a bullish note on CoreWeave with an aggressive $140 price target. "Don't forget that Nvidia is basically financing all these deals with them, with other hyperscalers because they want to block off the competition. They want to make sure that CoreWeave and others are using Nvidia GPUs and not AMD GPUs," Liani said on Sozzi Unleashed.

Liani added, "So at the end of the day, there is an inherent interest both ways. And I'm sure that you're going to hear from everyone on the planet that has a vested interest in the build-out of data centers. You're going to hear comforting kinds of comments about the validity of the demand and the sustainability of the demand, including Jensen. It's just a question of time."

CoreWeave's corporate bonds across maturities have continued to be dumped amid fears of an AI slowdown and its implications for the company's precarious balance sheet.

The selling spread to other AI cloud stocks: Nebius (NBIS) fell 11%, Oracle (ORCL) dropped another 9%, and the following stocks sank more than 10%: DigitalOcean (DOCN), Hut 8 (HUT), Cipher (CIFR), TeraWulf (WULF), and IREN (IREN). Nvidia's own stock fell 2% Thursday morning.

In January of this year, Nvidia announced an expansion of its relationship with CoreWeave. The deal included Nvidia investing $2 billion in CoreWeave stock. CoreWeave committed to using Nvidia's technology to build more than 5 gigawatts of AI factories by 2030.

Nvidia now holds 47.2 million shares of CoreWeave stock, or around 10% of the company.

CoreWeave is also a huge customer of Nvidia.

CoreWeave buys GPUs from Nvidia and then rents that compute out to other companies, including hyperscalers like Meta (META).

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show and the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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