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- Investors are questioning neoclouds' business model but Nebius says AI computing prices are rising
Nebius sees AI computing prices rising more than expected, chief revenue officer Marc Boroditsky told CNBC, as investors question the neocloud business model after CoreWeave's borrowing costs spiked. He said Nebius is not carrying the debt CoreWeave has, that its 2027 capacity would sell out if brought online, and that a Tuesday auction showed continued price increases. Crusoe CEO Chase Lochmiller said prices for older Nvidia chips such as A100s and H100s are higher than when they were first deployed. Nebius shares rose after SpaceX reported its AI business revenue jumped to $7.56 billion, with its CFO saying pricing is tracking slightly above the high end of the $30 to $50 per watt range.
- CoreWeave Falls 4% as HSBC Reiterates Bearish Call on Debt Risk; Nebius Drops 5%, Oracle Holds Steady
CoreWeave (CRWV) fell 4% to $58.67 and Nebius (NBIS) dropped 5% to $162.20 in morning trading, while Oracle (ORCL) edged down 0.52% to $128.95. HSBC repeated its Reduce rating on CoreWeave, and the pressure is concentrated in debt-funded AI cloud providers as borrowing costs rise, with Nebius falling further than CoreWeave even though the note named only CoreWeave. CoreWeave touched a new one-year low on Monday, and its bond yields and credit default swap pricing are at distressed levels. The First Trust Cloud Computing ETF (SKYY) was unchanged at $161.08, and the Invesco QQQ Trust (QQQ) fell 0.75% to $712.98, indicating the damage is contained.
- Social Buzz: Wallstreetbets Stocks Mostly Lower Premarket Tuesday; CoreWeave, Nebius Group to Decline
- Nebius Slides 3% Despite Rosenblatt's New Buy Rating; CoreWeave Slips
Nebius (NBIS) shares fell 3% to $214.99 even though Rosenblatt Securities initiated coverage with a Buy rating last Friday, ranking Nebius near the top of the neocloud group alongside CoreWeave. The stock is down 11% over the past week, while CoreWeave (CRWV) slipped 1% to $80.91. The article links the broader selloff to a disputed report on OpenAI's revenue run-rate, and says Nebius has issued no new announcement explaining the latest decline. Bullish points include a $37.5 billion backlog, Q2 2026 revenue of $582.3 million and FY2026 revenue guidance of $3 billion to $3.4 billion, but the stock trades below its 50-day moving average of $224.42. CoreWeave's $104 billion backlog comes with negative free cash flow of $5.74 billion.
- CoreWeave and Nebius Stocks Are Crashing. Time to Buy the Dip?
Shares of Nebius and CoreWeave each fell 25% in the week of October 12 to 16. The sell-off stems from the yield on CoreWeave's debt in the secondary market surging to 15%, versus roughly 5% on Treasuries, which pushes the debt into 'distressed' territory and signals doubts about its ability to meet obligations. Nebius sold off in sympathy as a fellow neocloud company. The bigger concern is that both companies must keep issuing debt to fund data centers, and if yields are high at issuance, the assumption of nearly unlimited cheap capital could be challenged. The author says it is unclear whether now is the time to buy.
- Nebius Vs. DigitalOcean: The Cash Positive Neocloud Arguably Looks Better
DigitalOcean and Nebius both reported Q2 2026 results: DigitalOcean grew revenue 28.6% and generated $60.59 million in free cash flow, while Nebius grew revenue 454.0% while spending heavily on data centers. DigitalOcean's inference business grew nearly 800% and makes up more than 70% of AI customer ARR, and its pro forma net leverage is 0.7 times after retiring about $472 million of convertible notes. Nebius's first-half capex of $8.13 billion far exceeded $4.50 billion in operating cash flow, so it raised $4.34 billion in convertible securities and $2.0 billion through NVIDIA warrants, and interest expense rose to $119.1 million from $4.8 million. The author says Nebius offers a bigger opportunity but carries greater dilution risk, while DigitalOcean's self-funded growth looks more durable. Both stocks have fallen more than 23% in a month.
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