Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Thematic (Sector/Industry)

<div><ul><li>The model tests the economics of the AI buildout. It maps spending from power and capex through clouds to end-market revenue, anchored on FactSet consensus for hyperscaler capex and cloud revenue while our assumptions for AI allocation, utilization, pricing and demand, and modeled intercompany transfers are eliminated.</li><li>Over time, we expect to use this model as a framework for evaluating new data points on capex, AI services revenue, and token pricing/consumption.</li><li>The buildout stays cash flow negative through 2030. AI capex rises from $824B in 2026 to $1.76T in 2030 ($6.7T cumulative) versus revenue of $306B and $1.56T. Cloud FCF is negative $530B and $588B, including assumed internal use benefits; infrastructure vendors generate $258B and $628B.</li></ul></div>

The model tests the economics of the AI buildout. It maps spending from power and capex through clouds to end-market revenue, anchored on FactSet consensus for hyperscaler capex and cloud revenue while our assumptions for AI allocation, utilization, pricing and demand, and modeled intercompany transfers are eliminated.Over time, we expect to use this model as a framework for evaluating new data points on capex, AI services revenue, and token pricing/consumption.The buildout stays cash flow negative through 2030. AI capex rises from $824B in 2026 to $1.76T in 2030 ($6.7T cumulative) versus revenue of $306B and $1.56T. Cloud FCF is negative $530B and $588B, including assumed internal use benefits; infrastructure vendors generate $258B and $628B.

AI Flow Industry Model : Tracking the Capex Flood and Revenue Streams

United States

CoreWeave, Inc. is a specialized cloud infrastructure company that provides high-performance computing resources optimized for workloads such as artificial intelligence, machine learning, visual effects, and batch processing. The company's CoreWeave Cloud Platform consists of proprietary software and cloud services that deliver the automation and efficiency needed to manage complex AI infrastructure at scale. Its platform supports the development and use of ground-breaking models and the delivery of the next generation of AI applications. CoreWeave operates a GPU-first architecture, optimized for training and inference of generative AI models, and also targets scientific and financial computing, as well as real-time 3D rendering needs. The company was founded in 2017 and is headquartered in Livingston, New Jersey.

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