CoreWeave Inc. (NASDAQ:CRWV) is reportedly exploring the use of financial derivatives to hedge against future declines in memory and storage chip prices, Reuters News reported on Tuesday.
Early Talks on Chip Price Hedges
The company is said to have held early-stage discussions about using financial derivatives, including put options, to protect itself from a future decline in memory and storage chip prices, the report said, citing people familiar with the matter.
It has not executed any hedging transactions, and the discussions remain in the preliminary stages.
CoreWeave did not immediately respond to Benzinga’s request for comment.
The Risk of Falling Chip Prices
Micron Technology Inc. (NASDAQ:MU) and SK Hynix Inc have said new manufacturing capacity is expected to be fully ramped up in early 2028, potentially increasing supply.
Last month, Micron said customers have committed about $22 billion, including roughly $18 billion in cash deposits, under long-term agreements to secure future memory supply.
The Reuters report added that cloud providers, including CoreWeave, have signed long-term supply agreements with Micron and SanDisk Corp. (NASDAQ:SNDK) to secure memory and storage chips during the AI infrastructure boom.
AI Demand Reshapes Supply Contracts
CoreWeave is one of the largest providers of AI cloud infrastructure, offering Nvidia Corp. (NASDAQ:NVDA)-powered computing capacity used to train and deploy large language models and other AI applications.
The agreements reduce supply risk but increase exposure to price risk if memory and storage chip prices retreat.
Price Action: The stock closed 4.05% lower on Tuesday at $79.94, while it edged up 0.64% in pre-market trading on Wednesday.
Benzinga edge rankings indicate CRWV has a Momentum score in the 6th percentile and a negative price trend across the short, medium, and long term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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