Investment bank D.A. Davidson has taken a neutral stance on Nebius Group (NBIS) and CoreWeave (CRWV), two of the most closely watched AI infrastructure names, even as it still sees a strong long‑term outlook for the AI cloud market. Following the news, CRWV and NBIS stocks tanked 7% and 13%, respectively, on Monday.
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New trading tool for CRWV bullsAnalyst Gil Luria said both companies remain well‑positioned to benefit from the massive surge in demand for AI compute power. But the Top analyst warned that valuation, margin pressure, and financing risks now limit near-term upside.
Nebius: Premium Valuation Caps Upside
Luria initiated coverage on NBIS stock with a Hold rating and a $250 price target, following a dramatic run‑up in the stock over the past year.
The analyst praised Nebius as “the best executing public AI cloud,” pointing to its strong day-to-day execution, tight control of capital, and broad AI cloud strategy. He also said NBIS’ balance sheet is healthier than its peers’, with very little net debt. He also noted the added value from Nebius-owned assets such as Avride and ClickHouse.
The analyst’s forecast shows very fast growth ahead. Nebius’ revenue is expected to rise from $534 million in 2025 to $3.36 billion in 2026 and then jump to more than $10.6 billion in 2027. But even with the strong fundamentals, Luria warned that Nebius stock trades at about a 30% premium to its backlog. This limits how much NBIS can climb in the near term.
CoreWeave: Profitability and Debt Are Red Flags
Luria also assumed coverage on CRWV stock with a Neutral rating, cutting its price target to $100 from $175.
The firm said CoreWeave is becoming a more important player in the AI infrastructure world. It also noted that the company has lowered its customer concentration by adding new big partners beyond NVIDIA (NVDA) and Microsoft (MSFT), including OpenAI and Meta (META).
But Luria also pointed out several worries. CoreWeave is still one of the least profitable AI cloud firms, with adjusted EBIT margins of only about 1% on an $8 billion annual revenue run rate. Rising memory and infrastructure costs could squeeze margins even more, and long‑term contracts may not fully protect the company from higher component prices. CRWV is also heavily leveraged, with borrowing costs above 9%, and recent insider selling adds another reason for caution.
The analyst expects CoreWeave’s revenue to grow fast, to nearly $13 billion in 2026 and more than $25 billion in 2027. However, he said the company’s heavy debt and thin margins explain why the stock should trade at a discount to Nebius.
Which Is Better, NBIS or CRWV?
Using TipRanks’ Stock Comparison Tool, we compared CoreWeave and Nebius to see which AI infrastructure stock Wall Street currently favors. Both CRWV and NBIS stocks carry a Moderate Buy consensus rating.
Analysts see more upside potential in CoreWeave, with an average price target of $134.09, implying about 34.71% upside from current levels. By comparison, Nebius’ average price target of $221.71 suggests roughly 16% upside.
