CRWV, IREN, NBIS Extend Slide: Elon Musk Says Buying A Neocloud Is 'Pointless'

(MENAFN- AsiaNet News)

• CoreWeave, Nebius and IREN extended their declines in overnight trading on Sunday.
• Musk clarified that SpaceX is not interested in buying out a neocloud company.
• Palihapitiya warned that weak capitalization and potential data-center delays could leave infrastructure underutilized in 2027, hurting returns.

Neocloud stocks extended their slide after billionaire entrepreneur Elon Musk said the sector will see“guppy-level death and consolidation” and that his rocket and AI firm SpaceX has no interest in buying a neocloud company.

CoreWeave (CRWV) and Nebius (NBIS) shares dropped 2.3% each in overnight trading late Sunday, while IREN Ltd's (IREN) stock slid 2%. The trio has declined sharply over the last two weeks amid concerns over the companies' debt-fueled business models.

“200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many,” Musk said in an X post, where he announced that SpaceX raised $40 billion in debt to buy GPUs.

He noted that debt markets had almost entirely shut off access to financing in recent weeks for companies without substantial revenue streams independent of AI data centers, adding that SpaceX does not fall in the category.

Asked by a user whether he was trying to drive the stock prices down for a potential buyout, Musk replied:“SpaceX is not buying any neoclouds. Pointless.”

Neocloud companies are facing a crisis of confidence. Concerns over their debt-fuelled expansion intensified in recent weeks, with soaring borrowing costs and questions over whether massive data-center investments can generate sustainable returns rattling investor sentiment across the sector.

CRWV declined 11.6% in the past week, its third consecutive week in the red. IREN and NBIS dropped 7.7% and 4% respectively.

Top Venture Capitalist Echoes Musk's Consolidation View 

Venture capitalist Chamath Palihapitiya warned that neoclouds are“disorganized and poorly capitalized,” while hyperscalers' bureaucratic processes are creating opportunities for faster-moving competitors. 

Palihapitiya expects data center pipeline delays to catch investors off guard in 2027, leaving computing capacity underutilized. Hyperscalers will prioritize their own needs over third-party customers, he argued, potentially leaving infrastructure“bought and paid for but effectively underearning” or“collecting dust.”

Nimble, well-capitalized players and large-scale operators to benefit from the disruption, he said, adding that“2027 will be a turbulent year” and the industry will see failed investments and consolidation.

Retail View On Neocloud Stocks

On Stocktwits, retail sentiment for CRWV, NBIS, and IREN dipped over the past week to 'bullish' as of late Sunday, with IREN the top trending stock at the time of writing.

“$IREN of course elon is not buying any neoclouds, he is already building his own data centers,” said a trader, while another said that Musk's post has triggered a“rush to sell before the bloodbath.”

Traders appeared optimistic about CoreWeave, especially given the sizable ownership by Nvidia. One wrote:“$CRWV NVDA owns 10% of this stock and it will pay for any vacant GPU capacity that CoreWeave has. This stock is guaranteed by NVDA. It's a father and son duo. With that said, risk is pretty much mitigated.”

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