Meta Platforms Just Gave a Massive Warning to CoreWeave and Nebius. Is It Time to Sell These AI Infrastructure Stocks?
Meta is reportedly planning to sell its excess cloud computing capacity, and that doesn't bode well for Nebius and CoreWeave.
Overview
Shares of neocloud infrastructure providers CoreWeave (NASDAQ: CRWV) and Nebius Group (NASDAQ: NBIS) were clobbered on July 1 after it emerged that hyperscaler giant Meta Platforms (NASDAQ: META) plans to compete with them.
CoreWeave stock shed almost 14% of its value in a single session, while Nebius dropped by 17%. Meta Platforms, on the other hand, gained nearly 9% after Bloomberg News reported that the Magnificent Seven company is planning to rent out its excess cloud computing capacity to customers. That doesn't bode well for CoreWeave and Nebius at first, as both companies are in the business of building dedicated AI data centers and renting out their capacity to customers looking to run AI workloads in the cloud.
Details
So, it was easy to see why their shares fell substantially following the Bloomberg News report. In fact, Meta won't just be moving into Nebius and CoreWeave's territory; the tech giant's reported move could also hurt the prospects of these neocloud providers. Let's see why that may be the case.
Source
Originally published at www.fool.com.