To The Moon

The recent sell-off in AI-related stocks has raised an important question: are investors losing confidence in AI demand, or are they simply becoming more cautious about how much money companies are spending to build AI infrastructure?

This week’s results from $CoreWeave, Inc.(CRWV)$ and $NEBIUS(NBIS)$ offer an interesting test.

CoreWeave has already reported its third-quarter results, while Nebius is due to report on November 12. Both companies operate in the fast-growing AI cloud market, but their funding structures and financial risks deserve closer attention.

1. CoreWeave: Impressive growth, but financing remains a concern

CoreWeave delivered strong third-quarter revenue of $3.66 billion, up approximately 168% year-on-year. Its revenue backlog also reached $132.5 billion, suggesting substantial contracted demand for its AI computing services.

The company raised its full-year 2026 revenue guidance to $13 billion–$13.3 billion.

These are encouraging figures. However, there is another side to the story.

CoreWeave reported a quarterly net loss of $709 million, including $846 million in net interest expense. It also expects full-year capital expenditure of $37 billion–$39 billion.

This highlights the challenge of its business model: building data centres and purchasing expensive computing equipment requires enormous upfront investment, while the financial returns arrive over time.

Strong demand is important, but investors also need to see that revenue growth eventually translates into sustainable profits and cash flow.

2. Nebius: The next earnings test

Nebius reports its third-quarter results on November 12.

The company has attracted attention through its rapid AI cloud expansion and major customer relationships. Its second-quarter revenue reached $582.3 million, up 454% year-on-year, while adjusted EBITDA was $236.2 million.

For the upcoming report, I would focus on:

• Revenue growth and whether management maintains its full-year outlook.

• Progress in delivering contracted computing capacity.

• Capital expenditure and how expansion will be funded.

• Customer prepayments and available cash.

• Whether operating margins can improve as the business scales.

Nebius has a different financial profile from CoreWeave, but it is not risk-free. Rapid expansion still requires significant investment, and execution delays or funding pressures could affect future returns.

3. What do these results tell us about the AI bubble?

I don’t think strong AI demand automatically means every AI infrastructure stock is a good investment.

The market is starting to distinguish between companies that have secured large contracts and companies that can actually deliver those contracts profitably.

There are three important questions:

• Demand: Are customers continuing to commit to long-term AI computing capacity?

• Funding: Can companies finance expansion without excessive borrowing or shareholder dilution?

• Profitability: Are margins and free cash flow improving as revenue increases?

If demand remains strong but financing costs keep rising, even companies with impressive revenue growth could face pressure on their share prices.

4. My strategy: Don’t confuse a lower price with lower risk

I would not rush to buy either stock simply because both have experienced sharp declines.

CoreWeave’s latest results demonstrate that AI demand remains substantial, but its high capital expenditure and interest costs deserve attention.

For Nebius, I would wait for the November 12 results before making a decision. Its revenue growth, cash position and funding strategy will help investors assess whether its expansion is financially sustainable.

Both companies offer exposure to the AI infrastructure opportunity, but they also carry significant execution and financing risks.

My conclusion

The AI investment story may not be over, but the market is asking tougher questions.

The next phase of the AI trade may reward companies that can turn massive infrastructure investment into recurring revenue, sustainable margins and positive cash flow.

For me, the key question is no longer just how fast these companies can grow, but how profitably they can grow.

For discussion purposes only. This is my personal market view, not financial advice or a recommendation to buy or sell any security.