As Coreweave ignites AI fervor, can Nebius (NBIS.US) use explosive performance to defend the rise in AI computing power? 

The Zhitong Finance App learned that CoreWeave (CRWV.US), one of the leaders of NeoCloud (NeoCloud), used strong performance growth data and computing power orders and financing arrangements that were much more optimistic than market expectations to greatly ease the market's anxiety and questioning about the new cloud business model, and that the company's strong financial reporting fundamentals and explosive orders have driven a massive rebound in the US stock market's broad AI computing power industry chain.

Another new cloud leader — that is, Nebius Group NV (NBIS.US), a European technology leader focusing on providing cloud-based AI computing resources in recent years. At a time when Nvidia CEO Huang Renxun was exposed to another negative impact incident, Nvidia's post-market collapse led to a sharp decline in the AI computing power industry chain after the post-market situation, what it urgently needs to prove next is that the increase in computing power can be delivered in parallel with production capacity that exceeds expectations, and capital can be realized faster than expected, leading to CoreWeave's strong performance and the Anthropic IPO roadshow. power The fervor continues. Nebius Group will announce its performance report and future outlook during the pre-opening session of the US stock market on November 12, Beijing time.

By the close of the US stock market on Wednesday, CoreWeave's strong financial reports and financing arrangements boosted the collective strength of the memory chip, AI chip, optical interconnection and new cloud sectors. CoreWeave and Nebius rose by about 24.7% and 15.4% respectively; however, after the market, media reports about Wong In-hoon's other affair and news that the board of directors discussed his stay caused Nvidia to drop more than 8%, and most AI computing power-related stock prices were under pressure.

Meanwhile, CoreWeave's explosive performance, quarterly revenue of US$16.956 billion disclosed in Anthropic's prospectus, and in particular, the AI application leader's procurement and leasing commitments totaling US$909 billion over many years continue to provide a basis for the expansion of computing power demand. What the market needs Nebius to answer next is whether strong demand can continue to be transformed into computational power that can be delivered, billed, and has a return on investment.

Nebius focuses on integrating GPUs, high-speed optical interconnection, storage and scheduling software into training and inference services, and strives to capture computing power price increases faster with a business structure based on 1-3 year contracts. Truist maintains a “buy” and target price of $355, which is optimistic about this ability to reprice; Citi raised its forward revenue forecast but lowered its target price, which reflects the market's higher demand for financing and valuation. If this financial report simultaneously hands over revenue exceeding expectations, faster capacity production, and clear financing continuity arrangements, Nebius is expected to advance the counterattack initiated by CoreWeave into a continuous verification of the profit potential of the new cloud, so that performance fundamentals can once again become an important bullish pricing basis for the AI computing power trading theme.

CoreWeave ignites a counterattack with computing power, and Nebius takes over to test growth

As of the close of US stocks on November 11, EST, CoreWeave rose 24.7%, Nebius rose 15.44% to close at $154.69; the NASDAQ 100 and Philadelphia Semiconductor Index rose 2.28% and 5.66%, respectively. Storage leaders Micron and SanDisk rose 11.89% and 13.69% respectively, while leading optical interconnect companies Lumentum and Coherent rose 10.67% and 9.25% respectively. The capital re-purchased AI chip-related core computing, storage, high-speed optical connectivity and computing power leasing, CPU, PCB, and 3D advanced packaging.

An important support for this round of rebound is that demand for computing power is beginning to receive double verification of revenue and funding sources. CoreWeave's third-quarter revenue reached US$3.661 billion, up 168% year over year. The annual revenue guidance was raised to US$13 billion to US$13.3 billion, and it is expected to receive approximately US$9 billion in advance payments and security deposits from customers over the next three months. At the same time, management made it clear that at the current yield level, it will mainly support construction through deferred withdrawal term loans (DDTL) matching specific customer contracts to reduce dependence on high-cost unsecured financing. The positive AI investment sentiment it conveys is undoubtedly that large customers promise to help computing power suppliers raise construction capital to a large extent, reducing the possibility that order expansion will be interrupted due to blocked financing.

The AI application side also provides a new basis for demand. According to Anthropic's prospectus, third-quarter revenue was US$16.956 billion, up about 1127% year on year and 46.7% month on month; procurement and leasing commitments totaled US$909 billion, the vast majority involving computing power and infrastructure. Of this, US$451.6 billion is expected to occur before the end of 2030, and the rest is mainly distributed between 2031-2045. This shows the link between model commercialization and long-term computing power procurement, but the transformation of these promises into supplier revenue still depends on specific delivery arrangements. As a result, Anthropic's IPO not only tests application-level valuations, but also tests the capital market's willingness to support subsequent computing power investments.

It is worth noting, however, that new trading variables appeared after Wednesday's session. Some media reported on Thursday morning, Beijing time, that Huang Renxun had another affair, and that Nvidia's board of directors discussed Wong In-hoon's stay. At one point, the stock price dropped more than 8% after the market; Nebius also fell about 4.1% after the market. If Nebius's earnings report exceeds expectations in terms of revenue, delivery and financing at the same time, it is expected that the market's confidence in computing power demand will be greatly enhanced following CoreWeave's strong earnings report, and may even significantly cool down the market's negative sentiment related to Nvidia's management uncertainty.

Nebius' core value in the AI computing power industry chain is similar to CoreWeave. It mainly organizes GPUs, electricity, high-speed networks, storage, and scheduling software into AI cloud services that can be delivered stably. Large model training requires a large number of GPUs to simultaneously exchange parameters and data, while inference and intelligence continue to consume computational, video memory, and storage resources. Purchasing a separate chip does not solve cluster efficiency and reliability problems. Nebius reduces the difficulty of customer deployment through InfiniBand interconnection, training scheduling, and managed inference platforms, and takes on capacity requirements that customers cannot build on their own in a timely manner. When supply is tight, fast delivery and shorter contract terms create repricing opportunities, so that demand growth is reflected more quickly in revenue per megawatt.

Nebius earnings preview: computing power requirements, contracts and financing plans are in focus

Nebius Group will announce its third-quarter results during the pre-market session of the US stock market on Thursday, Beijing time. Wall Street analysts agree that the company will lose 0.63 US dollars per share for the quarter, with revenue of 907.17 million US dollars.

In the last quarter, the Netherlands-based AI computing power infrastructure provider announced better-than-expected second-quarter results and reiterated the guidance on various indicators for the full year of 2026, including an annualized revenue operating rate of $7 billion to $9 billion, group revenue of $3 billion to $3.4 billion (median range of $3.2 billion), and a group adjusted profit before interest, tax, depreciation and amortization (EBITDA) rate of approximately 40%. The market's consistent forecast for full-year revenue is $3.35 billion.

Senior Wall Street analysts are bullish as a whole and will focus on Nebius' future construction schedule, financing plans, and pricing for new contracts and shorter term contracts.

According to Truist Securities, Nebius is particularly well equipped to seize the opportunity of rising computing power prices because its business mainly consists of contracts with a period of 1 to 3 years. The agency believes that the company will have more flexibility in shorter contracts to capture the benefits of price increases.

This well-known Wall Street brokerage firm predicts that Nebius will have an annualized revenue operating rate of more than 4.8 billion US dollars this quarter, and the connected capacity will reach 730 megawatts, of which the operating capacity is about 600 megawatts, and reaffirms the “buy” rating and target price of 355 US dollars.

Citigroup's stock market research department also raised Nebius' revenue forecast for the 2027-2030 fiscal year by 20%. At the same time, it is expected that the operating rate of annualized revenue per megawatt will accelerate in the next few years against the backdrop of continued growth in computing power demand. However, although the brokerage gave the stock a “buy” rating, it lowered the target price from $324 to $265.

Overall, Seeking Alpha's quantitative ratings, Seeking Alpha's own platform analysts, and Wall Street analyst ratings compiled by Tipranks all took a bullish stance, giving the stock the most optimistic bullish rating equivalent to a “buy.”

Compared to its peer CoreWeave, Nebius' overall credit debt and operating leverage are much lower, so the company's stock price is resilient compared to the former, which almost fell behind. Nebius's stock price has risen by more than 82% since this year, significantly outperforming the S&P 500 benchmark index, which rose nearly 10% during the same period.

However, Seeking Alpha analyst Lee Bailey warned that Nebius faces the risk of high capital expenses, equity dilution, and equipment upgrades, and gave it a “sell” rating. Bailey added that Nebius signed major contracts with Microsoft and Meta, providing rare visibility into revenue, but rapid expansion also exposed the company to the risk of broken capital chains associated with execution and delivery and AI infrastructure financing.

Bailey concluded, “The current pricing and margins are excellent, but their sustainability remains uncertain as hardware refresh cycles and future competition could erode returns.”

In the past three months, earnings per share expectations have been raised 4 times and lowered 3 times, while revenue expectations have experienced 7 increases and 5 decreases.

Higher computing power prices open up revenue space. Capacity expansion and AI infrastructure financing costs affect shareholder returns and the rebound trajectory of AI computing power

Nebius plans to announce the third quarter results before the US stock market on November 12. Seeking Alpha's consolidated consensus forecast was revenue of US$907.17 million and loss of $0.63 per share, corresponding revenue growth of about 521% year over year and 55.8% month-on-month increase. The increase that the market is really concerned about is whether the new capacity will begin to contribute revenue and whether the company can meet its annual revenue operating rate (ARR) target of $7 billion to $9 billion at the end of the year.

Note that ARR here is calculated by multiplying AI cloud revenue for the last month of the quarter by 12, reflecting the size of the business at the end of the period. Truist expects ARR to exceed US$4.8 billion in the third quarter, corresponding to 730 megawatts of connected capacity and about 600 megawatts of operating capacity. The gap between the two is the key to converting production capacity into billable services.

The common basis for institutions to be optimistic is computing power supply constraints and short contract-weight pricing. Truist maintains a “buy” and a target price of $355, and is optimistic about a business structure based on 1-3 year contracts to capture price increases; Citi raised its 2027-2030 revenue forecast by 20%, but at the same time lowered the target price from $324 to $265 to maintain “buy”; another Wall Street financial giant, Bank of America, recently reiterated a “buy” and a target price of $310, which is optimistic about capacity expansion and price increases for shorter contracts.

Based on the closing price of $154.69 on November 11, the three targets implied an increase of about 129.5%, 71.3%, and 100.4%, respectively. The combination of Citibank's revenue forecast increase and target price reduction shows in particular that business growth and equity valuation are being driven by different factors, and strong demand still needs to be supported by financing and capital returns.

To a certain extent, this difference can be understood from the financing structure. Nebius announced in October that it had obtained Cities' US$3.5 billion priority guarantee financing for a period of 364 days. The initial interest rate was SOFR plus 275 basis points for the term, then increased as agreed. Therefore, after short-term construction capital is replenished, the market also needs to evaluate how long-term financing will continue. For GPU cloud companies, rising rents improve revenue, equipment utilization determines the degree of dilution of fixed costs, and depreciation, renewal expenses, and interest determine the final return. The most valuable financial report that exceeded expectations should have been the simultaneous appearance of stronger AI computing power order data, higher billable capacity, better contract prices, and financing arrangements that more moderately match the pace of delivery.