CoreWeave and Nebius Group: 1 Soars, the Other 1 Plunges. A Tale of 2 Neoclouds

A tale of two neocloud operators, CoreWeave and Nebius Group, have recently reported contrasting financial results, revealing different stories for investors. CoreWeave, the world's largest neocloud provider, experienced an impressive surge in revenue, growing 168% to $3.66 billion in Q3, while its operating income skyrocketed fourfold to $207 million.

Despite a heavy debt load, the company managed to reduce its per-share loss to $1.27, compared to a consensus estimate of $1.46. CoreWeave also reported a significant backlog of $132.5 billion, leading to a forecasted full-year revenue of $13.15 billion, up from $12.8 billion only three months prior. Investors responded positively, driving the stock up 25% in the following days.

In contrast, Nebius Group, a smaller rival, reported even more astonishing growth, with revenue surging 571% year-over-year to $981 million in Q3. The company's adjusted net loss narrowed to $38 million, a drastic change from the $120 million loss in the previous quarter, resulting in a loss per share of $0.13. Analysts' consensus estimates had Nebius reporting $907 million in revenue and an adjusted loss per share of $0.63.

However, Nebius lowered its full-year outlook, anticipating revenue between $3 billion and $3.4 billion and increasing its capex forecast to $27 billion for the fiscal year. Despite these strong results, the stock price fell 16% due to concerns regarding delayed capacity online and the shift of a portion of expected revenue into the following year.

CoreWeave's execution and reduced cost of debt have given it an edge and boosted investor confidence, while Nebius Group's valuation remains considerably higher at 22 times sales.