Not Revenue. Not Growth. Here’s What I’ll Be Watching When CoreWeave and Nebius Report This Week.
CoreWeave and Nebius have sold off hard, and this week's earnings could show how much the midterm results and higher borrowing costs are weighing on their growth plans.
CoreWeave (CRWV) and Nebius Group (NBIS) stocks have plummeted nearly half their value since early October. Their earnings reports this week could have significant implications for shareholders. A recent Democratic midterm victory may have further impacted the shares. Investors are concerned about the potential data center build-out moratoriums and oversight of the AI industry that could arise as a result of the election.
CoreWeave, which has six active sites in Texas, is heavily reliant on debt financing, with $35.1 billion in on-the-books debt. The yield on some of its bonds has surpassed 16%, reflecting concerns over the company's borrowing. Nebius, on the other hand, carries $8.5 billion in debt but may turn to a $3.5 billion loan facility from Citi or a high-yield bond sale to fund its operations.
Analysts are expecting strong growth from both companies, but investors will be closely monitoring cost improvement and the impact of construction and borrowing costs on cash flows. The election results could also influence planned projects and the ability of the companies to manage rising borrowing costs.
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