CoreWeave Falls 4% as HSBC Reiterates Bearish Call on Debt Risk; Nebius Drops 5%, Oracle Holds Steady

Debt-funded AI cloud providers are back under pressure as concerns about borrowing costs spread across the group. First of all, CoreWeave (NASDAQ:CRWV) shares are down 4% to $58.67 in morning trading.

Moreover, Nebius Group (NASDAQ:NBIS | NBIS Price Prediction) shares are falling harder, down 5% to $162.20. However, Oracle (NYSE:ORCL) stock is only down 0.52% to $128.95, a comparatively steady contrast to the slide in CoreWeave and Nebius shares.

That split shows strain concentrated in the most debt-reliant corner of AI infrastructure, where CoreWeave and Nebius both operate. With its far broader revenue base, Oracle stock sits outside the worst of the selling.

HSBC Doubles Down on Its Reduce Call

HSBC repeated its Reduce rating on CoreWeave in a note on Monday. The accompanying price target sits well below where CoreWeave shares last closed, leaving little doubt about the direction of that call.

CoreWeave’s central challenge is revenue per megawatt of capacity, which could trail what larger cloud providers earn. Those bigger rivals offer broader services. They serve more diversified customers, giving them more ways to make money from each data center they run. Scale matters here, because bigger platforms can spread their costs across many products.

Two more pressure points weigh on CoreWeave. Slower growth at AI model developers could soften demand for short-term capacity, and rising borrowing costs make new infrastructure harder to finance.

Borrowed Money Links CoreWeave and Nebius

CoreWeave and Nebius both rent AI computing capacity and fund much of their data center expansion with debt, and this structure ties each company’s economics directly to financing costs. When lenders demand higher rates, CoreWeave and Nebius feel the pressure on every new facility.

Nebius shares are slipping further than CoreWeave shares even though the bearish note names only CoreWeave. The gap marks the move as pressure on debt-funded neoclouds (specialist providers that rent out GPU capacity) as a group.

Recent dealmaking at CoreWeave looks healthy. The company signed several high-priced short-term capacity contracts between May and September and reports a large revenue backlog. On Monday, CoreWeave shares touched a new one-year low and closed slightly lower. Credit markets are flashing more stress, with CoreWeave’s bond yields and credit default swap pricing at distressed levels.

Oracle and Cloud Funds Hold Their Ground

Oracle’s database and enterprise software revenue sits alongside its cloud infrastructure business. That mix gives Oracle several income streams beyond leased AI computing capacity. With Oracle shares flat, CoreWeave and Nebius shares stand apart from the wider cloud group.

A pair of funds shows how contained the damage to CoreWeave and Nebius looks. The First Trust Cloud Computing ETF (NASDAQ:SKYY) is unchanged at $161.08, even though it holds both CoreWeave and Oracle shares. Large-cap tech is softer: the Invesco QQQ Trust (NASDAQ:QQQ) is down 0.75% to $712.98.

CoreWeave’s Financing Test

CoreWeave now faces the question of whether it can finance new capacity without borrowing costs climbing further. CoreWeave’s high-priced contracts and large backlog give the bullish case real substance, while distressed credit pricing gives the bearish case equal weight. That tension leaves CoreWeave stock highly sensitive to any shift in credit conditions.

Every new data center at CoreWeave depends on fresh funding, so the cost of that money matters as much as customer demand. Investors should consider keeping their position sizes modest until CoreWeave’s financing question resolves.

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