Nvidia-Backed Neocloud Stocks Plummet Amid Balance Sheet Concerns

Nvidia-backed neocloud companies CoreWeave and Nebius are experiencing significant declines in their stock prices, with some falling by as much as 61% or more from their peak values.

This downturn is part of a broader trend affecting the industry, with other major players such as Riot Platforms, MARA Holding, Cipher Mining, and HIVE Digital also seeing sharp drops in their share value.

The companies have been plagued by concerns about their balance sheets, including substantial debt levels. CoreWeave's total debt has risen to over $25 billion, while Nebius and IREN have $8.5 billion and $4 billion in debt, respectively.

Despite these risks, analysts remain optimistic about the future prospects of these companies, with predictions suggesting significant revenue growth and potential share price increases. CoreWeave is expected to see its revenue jump by 146% this year and 100% next year, reaching $25 billion, while Nebius is expected to grow 540% this year and 237% next year.