BNP Paribas Expresses Caution on AI Cloud Service Providers, Leading to Sharp Declines for CoreWeave and Nebius

BNP Paribas has recently issued a new research report on AI cloud infrastructure service providers CoreWeave, Inc. (CRWV) and Nebius Group (NBIS), raising market concerns about the sustainability of the AI computing power industry.

As a result, both companies' stock prices experienced significant declines on July 2nd, with CoreWeave, Inc. falling approximately 5.4% and Nebius Group dropping around 7.4%.

In the report, BNP Paribas analyst Stefan Slowinski assigned an "outperform" rating to CoreWeave, Inc. with a price target of $192, while giving Nebius Group a "neutral" rating with a $255 target.

Despite strong demand, with both companies having sold out their GPU capacity and Nebius Group reporting a 684% year-over-year revenue increase in the first quarter, the analyst believes the industry faces challenges transitioning from model training to inference, with capital structure sustainability being the core issue.

Data shows CoreWeave, Inc. carries total debt of $50.8 billion, with a debt-to-equity ratio of 522%, and negative free cash flow of $10.6 billion, placing it under significant pressure during the industry shift.

In contrast, Nebius Group has a debt-to-equity ratio of 117% and holds approximately $9.3 billion in cash, with a net cash position of about $848 million, indicating a more robust financial standing.

Furthermore, reports that Meta Platforms is considering launching its own AI cloud service, potentially becoming a direct competitor to CoreWeave, Inc., have added to market worries.

BNP Paribas notes that the economic logic of the inference era prioritizes cost efficiency over raw computing throughput, suggesting that business models solely reliant on GPU rentals may face margin compression risks.

However, the analyst also believes the AI computing power pricing environment remains favorable, with demand consistently outstripping supply, and suggests that if CoreWeave, Inc. successfully executes its capacity expansion plan for the second half of 2026, it could still achieve a stock price recovery.