While CoreWeave continues to dominate headlines with its meteoric stock surge, a growing number of Wall Street analysts are turning their attention to its lesser-known competitor, Nebius Group (NASDAQ: NBIS), citing stronger financial resilience and strategic advantages in the booming AI infrastructure sector.
The cloud computing arena, fueled by explosive demand for AI computing power, is witnessing a dramatic realignment. On Tuesday, CoreWeave announced a $14.2 billion cloud services agreement with Meta, driving its shares up 12% in a single session and bringing its monthly gains to 46%. Despite this rally, DA Davidson analyst Gil Luria maintained an “Underperform” rating on CoreWeave with a $36 price target, arguing that Nebius presents a more compelling business model in the emerging cloud space.
Fellow DA Davidson analyst Alexander Platt highlighted a significant valuation discrepancy between the two firms. While CoreWeave boasts a $30 billion order backlog and a market cap of approximately $60 billion, Nebius—with a $20 billion order backlog—commands a market cap of just $28 billion. Platt emphasized that Nebius’s recent $17.4 billion partnership with Microsoft not only enhances its backlog quality but also reflects undervalued non-core assets. Despite a 70% monthly stock surge, Platt believes the Microsoft deal alone could drive further upside.
Luria pointed to CoreWeave’s capital structure as a core concern. With a return on assets below 5% and financing costs exceeding 9%, the company has relied on debt and even used Nvidia GPUs as collateral to fund its high capital expenditures. In a high-interest-rate environment, this model may prove unsustainable as CoreWeave races to meet contractual commitments.
In contrast, Nebius has the flexibility to raise capital by divesting non-core equity stakes—such as in edtech platform TripleTen and autonomous driving software firm Avride—without increasing its debt burden.
Seaport Research analyst Jay Goldberg noted that CoreWeave’s reliance on a handful of hyperscalers and AI firms poses concentration risks. Nebius, meanwhile, is actively diversifying its client base and demonstrating superior capital efficiency. “Nebius leads in customer mix, unit economics, and balance sheet strength,” Goldberg summarized.
As AI-driven cloud demand accelerates, capital efficiency and sustainable business models are becoming critical metrics for investors. While the market celebrates CoreWeave’s blockbuster orders, institutional players are already eyeing the underdog—positioned with both valuation appeal and financial durability.
