Rothschild Redburn warns that falling GPU prices and heavy debt loads threaten the long-term profitability of AI infrastructure providers Nebius Group and CoreWeave.
Rothschild Redburn initiated Sell on NBIS, citing falling GPU prices and a rich 46x forward earnings multiple that leaves little cushion if pricing power slips.
Rothschild Redburn initiated Sell on CRWV, highlighting $72 billion in total liabilities against only $5 billion in equity and the risk of compressed neocloud returns from falling GPU prices.
Rothschild Redburn initiated Sell ratings on Nebius Group (NBIS) and CoreWeave (CRWV), citing concerns over compressed neocloud returns. The firm warns that falling GPU prices, rising hyperscaler capacity, and high financing costs threaten the unit economics of both companies. Despite the bearish outlook, both firms recently reported strong revenue growth and pricing power for high-end Blackwell and Vera Rubin chips.
The firm believes that falling GPU rental prices, increased in-house capacity from hyperscalers, and expensive financing costs will compress profit margins for these AI infrastructure providers.
CoreWeave carries significant debt with $72 billion in liabilities against $5 billion in equity, while Nebius Group trades at a rich 46x forward earnings multiple, leaving both vulnerable to market shifts.