The neocloud trade finally has a fresh bear case that attacks the business model rather than simply calling the stocks expensive. On September 21, Rothschild Redburn initiated CoreWeave, Inc. (NASDAQ:CRWV) and Nebius Group N.V. (NASDAQ:NBIS) at Sell, arguing that falling GPU-rental prices, hyperscalers’ own capacity and expensive financing could compress returns. Both stocks rose around the call, which makes the disagreement more interesting: investors are still paying for scarcity and growth while the analyst is betting that AI compute becomes progressively more commodity-like.
We recently compared why CoreWeave pays SOFR plus 5.5% while Nebius pays plus 2.5%, and tested what Nvidia’s older GPUs still earning rent does—and does not—prove for CoreWeave. Those two clues make Redburn’s Sell calls more useful: they let investors test whether the real fault line is demand, financing, or the useful life of the hardware.
The bull case is contracted demand, not permanent scarcity
CoreWeave, Inc. has the strongest defense because it already has large contracted customers and a scale advantage in deploying Nvidia systems quickly. If frontier labs and cloud companies continue to need capacity faster than they can build it, CoreWeave can keep filling new campuses before rental rates fall enough to hurt returns. The risk is financing. Debt, equipment commitments and long-lived facilities can outlast today’s premium GPU pricing, and customer concentration magnifies any renegotiation.
A new data center facility in Plano, Texas. Photo from CoreWeave
Insider Monkey’s database showed 71 hedge funds with reportable CoreWeave longs in Q2 2026, up from 63 in Q1. Magnetar Capital held about 52.06 million shares after reducing its position roughly 25%. Those filings predate Redburn’s September rating.
Nebius has more optionality, and more valuation sensitivity
Nebius Group N.V. has a different bull case. It combines AI infrastructure with a broader platform strategy and has been signing large compute agreements while expanding capacity. That can produce operating leverage if utilization remains high. The bear case is that capital intensity arrives before mature margins, leaving equity holders exposed if GPU economics normalize faster than revenue scales.
Hedge-fund participation in Nebius jumped to 86 funds in Q2 from 60 in Q1. Orbis Investment Management held about 6.49 million shares after cutting its position roughly 22%. Short interest was 45.27 million shares as of August 31, equal to about 17.89% of float with 2.31 days to cover. Nebius also has convertible securities, so some of that short position may reflect hedging rather than a simple directional bet.
Redburn’s thesis does not require AI demand to collapse. It only requires the economics of renting GPUs to get less exceptional as supply broadens and big customers build their own infrastructure. CoreWeave and Nebius can still grow rapidly in that world, but revenue growth would have to outrun falling unit economics and financing costs. That is the point investors should test now: whether these companies are becoming durable cloud platforms or merely very efficient ways to finance scarce hardware during the shortage phase.
