CoreWeave and Nebius Plunged 14% and 17% in a Single Day. Which Beaten-Down AI Cloud Stock Is the Better Rebound Bet?
The most concerning part of Wednesday's sell-off wasn't the size of the drops -- it was who caused them.
Overview
Wednesday gave the artificial intelligence (AI) cloud specialists a preview of their biggest structural risk: the customer that becomes a competitor. Bloomberg reported that Meta Platforms is developing a cloud business that would sell AI computing power -- including, possibly, raw computing capacity of the kind specialist providers rent out today. Shares of CoreWeave (NASDAQ: CRWV) plunged 13.9% to $85.68, and Nebius Group (NASDAQ: NBIS) sank 17% to $229.18.
The reaction wasn't just about new competition. Meta is one of the biggest customers both companies have -- CoreWeave has disclosed a $21 billion commitment from Meta, while Nebius landed an agreement with Meta worth up to $27 billion. A Meta that builds enough capacity to sell the excess is a Meta that may eventually rent less of it.
Details
With CoreWeave now down about 48% from its 52-week high of $166.22 and Nebius down about 24% from its high of $299.86, which beaten-down stock is the better rebound bet? The answer comes down to what a dollar invested in each buys you in growth, contracted revenue, and balance-sheet risk.
Source
Originally published at www.fool.com.