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Original headline: Neoclouds : Goldman Sachs Upgrades CoreWeave . Microsoft Shelves Nscale Project .
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Keywords
MSFTNVDACoreWeavecloud computingartificial intelligence
Open a keyword to see other news on the same topic.
Related tickers and likely impact
MSFT
▼ Likely negativeMicrosoft
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $4.0T |
| Close on 10/16/2026 | 528.95 |
| Change that session | -1.94% |
NVDA
▲ Likely positiveNvidia
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Neocloud Stock Collapse: Buying Opportunity or Run for the Hills?
Neocloud stocks fell sharply after Gartner predicted that 80% of companies in the space would cease to exist by 2030, with CoreWeave (CRWV) down 11.91%, Nebius Group (NBIS) down 12.18%, and Applied Digital (APLD) down 11.48%. In June, Gartner had expected neoclouds to capture 20% of the AI cloud market by 2030, but it now says AI revenue, projected at $3.6 trillion by 2030, will not cover roughly $1 trillion in AI infrastructure spending this year and $6 trillion more between 2027 and 2030. Gartner expects neoclouds to be hurt most because they need quick returns and lack the core businesses that help hyperscalers fund AI. Neoclouds also rely heavily on debt to buy GPUs, which have useful lives of about six years and depreciate quickly. The article's author thinks most neoclouds will fail and advises against investing in the sector.
- Neoclouds: Goldman Sachs Upgrades CoreWeave. Microsoft Shelves Nscale Project.
- What Wall Street Expects from The Q3 Cloud and Infrastructure Scorecard: Microsoft Vs. Amazon
Azure grew 43% and AWS 37% last quarter, and investors want proof that heavy AI spending is turning into revenue. Microsoft 365 Copilot passed 30 million paid seats, while Amazon's AI and chips businesses each passed $25 billion in annualized run rates. Microsoft's commercial remaining performance obligations rose 84% (25% without OpenAI), while its free cash flow fell 23.2% to $19.64 billion. Amazon's trailing 12-month free cash flow was negative $7.6 billion after $54.21 billion of capital spending in one quarter, and its $5.75 EPS included a $53.4 billion one-time gain tied mainly to its Anthropic stake. Microsoft's operating margin is 46.8% versus Amazon's 11.2%, and Amazon is expected to report on October 29.
- Prediction: Microsoft Stock Is Going to Soar After Oct. 28
The article argues that recent market volatility stems from doubts about the sustainability of AI infrastructure spending, making Microsoft's upcoming earnings report critical. Microsoft reports fiscal 2027 first-quarter results on Oct. 28, focusing on Azure and Copilot; Copilot 365 licenses reached 30 million as of June 30, up 50% from three months earlier, yet remain small against more than 400 million 365 licenses. Azure carries $678 billion in remaining performance obligations (RPO), and its revenue growth accelerated to 43% in the final quarter of fiscal 2026. The author cites a forward P/E of 27.3 as evidence of attractive valuation, but warns that OpenAI has committed over $300 billion to Azure without currently having that money. The author suggests investors may manage risk by keeping a small position size.
- Why souring sentiment on CoreWeave should matter to investors
CoreWeave (CRWV) shares fell sharply this week, pushing its six-month decline to 46%, as two factors collided: its corporate bonds across maturities were sold off on fears of an AI slowdown and concern over its precarious balance sheet. A Gartner report forecasting that over 80% of neocloud providers will cease independent operations by 2030 added to the pressure. CoreWeave said it is confident in its funding, and several Wall Street firms defended it, including BofA's Tal Liani, who called the move sentiment-driven rather than about the company's ability to pay its debt and maintained a $140 price target. Liani expects fundamentals such as revenue growth to matter once the period of concern passes.
- AI debt concerns drive default insurance costs to record highs
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