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Engineer & Portfolio Manager, Author of Tech Investments Newsletter
CoreWeave may have a downside backstop because Nvidia needs a competing neocloud ecosystem on its stack as hyperscalers and leading frontier labs shift spending toward custom ASICs. The personal bet is that Nvidia would step in if CoreWeave gets into trouble. Bernstein thinks intervention in a true downside would raise the floor, though not necessarily re-energize the stock. x.comÂ
Nebius and CoreWeave are good plays on rising GPU pricing driven by strong compute demand. JPMorgan upgraded CoreWeave to Overweight, citing 25% July price changes across SKUs, frequent price increases at Nebius, peer short-term contracts priced near 3x CoreWeave's long-term range, and recent CoreWeave contracts at about $40M per MW. Per JPMorgan, CoreWeave management says pricing adds 5-10 points of contribution margin versus prior contracts, so higher prices aren't just a cost pass-through. x.comÂ
CoreWeave should not fall because Jensen Huang will not let it, given Nvidia's tie to the company. Per @aleabitoreddit, Huang said CoreWeave's strength is improving and its cost of capital is falling, but saw no need for Nvidia to provide a financial backstop. Nebius is a safer bet. x.com x.comÂ
CoreWeave's falling financing costs make debt fears look overdone. Nvidia CEO Jensen Huang says its cost of capital is falling and strength rising, so Nvidia need not backstop it. CoreWeave is superior to Nebius: Oguz Erkan says its rates are falling as deployed capacity earns more, while Nebius's rise as it scales. Dan at DivesTech expects upcoming hyperscaler earnings to reinforce capex growth and says CoreWeave fears are overdone. x.com x.com x.comÂ
CoreWeave, Nebius, Oracle and IREN cannot count on Nvidia to absorb their debt risk because its AI funding creates no obligation to rescue them. If the AI trade unwinds and they become desperate for cash, their assets could become acquisition targets at a fraction of peak valuations; Nvidia might acquire them cheaply instead of bailing them out. x.com x.comÂ
CoreWeave looks positioned to be one of the biggest beneficiaries of years of demand for GPU computing at scale. It should be one of the most important players in the AI infrastructure buildout, with Jensen Huang and Nvidia deeply tied to it. At $50 a share, its debt load is not a concern; the stock could look like one of the best buying opportunities by decade-end. x.com x.comÂ
Jensen Huang's assessment of CoreWeave's improving strength and falling cost of capital supports the view it will be a monster one day. He says Nvidia does not need to backstop CoreWeave; his assessment carries more weight here than retail opinion. x.comÂ
CoreWeave looks doomed unless Nvidia steps in, which seems unlikely; Nvidia would more likely hire away its engineers. The warning follows reports from rdd147 that CoreWeave bonds were being dumped across institutions at roughly 14-15% yields, raising concerns about its ability to make payments. x.comÂ
Hyperscaler borrowing could raise Nebius and CoreWeave's financing costs as investors favor safer debt. Microsoft reportedly plans to borrow. Nebius has prepayments and cheaper funding; CoreWeave has more debt. Nebius is strongly preferred if credit tightens. If rates fall and CoreWeave turns its $104B backlog into revenue, EBITDA and cash flow, it could have significantly more upside. Google expects more third-party compute use in Q4; Microsoft cites delayed deliveries. x.com x.com x.comÂ
Positive big-tech commentary about compute over the next two weeks could support CoreWeave. The stock could still fall further; buying on a further decline would depend on the investment thesis remaining intact. x.comÂ
CoreWeave may run out of financing before it can access GPUs under contract in about four years. If it cannot pay Nvidia, share sales are its remaining option until investors see no path to payment and the stock collapses. GPU-backed loans are no longer available even with customer backing; bankruptcy is forecast for Q3 2027 based on its books. x.com x.com x.comÂ
Compute demand is too high for CoreWeave's decline to keep going. Its continued weakness alongside a rising Nebius looks overdone, making this a possible bounce point rather than a certain turnaround. x.comÂ
