BCA Research Sees a Dangerous Risk in CoreWeave (CRWV) and Nebius (NBIS)

BCA Research Sees a Dangerous Risk in CoreWeave (CRWV) and Nebius (NBIS)

Habib Ur Rehman

Fri, August 21, 2026 at 8:50 PM GMT+3 3 min read

• CRWV -2.13%
• NBIS -0.45%

BCA Research has a warning for investors chasing the AI cloud boom. In a recent note, strategist Noah Weisberger argued that neocloud companies risk destroying capital because they are using borrowed money to build what could ultimately become a low-margin, commoditized computing service. CoreWeave, Inc. (NASDAQ:CRWV) and Nebius Group N.V. (NASDAQ:NBIS) sit near the center of that argument.

CoreWeave's Growth Comes With a Heavy Price

The concern is easiest to see at CoreWeave, Inc. (NASDAQ:CRWV). Second-quarter revenue more than doubled to $2.58 billion, but the company still posted a $626 million net loss and $640 million of net interest expense. CoreWeave also spent $9.4 billion on capital expenditures during the quarter and raised its full-year capex forecast to $35 billion-$39 billion. Its June-quarter filing showed $35.6 billion of future principal payments on debt. BCA's point is that rapid revenue growth may not create attractive shareholder returns if the cost of buying GPUs, building data centers and financing them absorbs too much of the economics.

For illustration purposes only. Photo by Brett Sayles on Pexels

Nebius Makes the Bear Case Harder

Nebius is growing even faster. Nebius Group N.V. (NASDAQ:NBIS) reported $582.3 million of Q2 revenue, up 454% year over year, while adjusted EBITDA reached $236.2 million. Yet capex was about $5.7 billion in the quarter. On August 19, Nebius priced an upsized $5.0 billion convertible-note offering after already closing roughly $4.34 billion of convertibles in March. That financing gives Nebius more room to expand, but it also shows how much capital the model requires before revenue can catch up.

There is a strong counterargument. Demand is not hypothetical. CoreWeave ended Q2 with $104.2 billion of revenue backlog, while Nebius said it had more than $40 billion of customer commitments and expects more than $9 billion of customer prepayments in 2026. Nebius's AI cloud business also produced a 49.7% adjusted EBITDA margin in Q2. If utilization stays high and customer contracts remain durable, BCA may be underestimating how quickly fixed infrastructure costs can be absorbed.

Hedge Funds Are Still Betting on Both Neoclouds

Insider Monkey's Q2 2026 data shows hedge funds remained heavily involved in both trades. As of Q2, 70 hedge funds held CRWV, up from 64 from the previous quarter. Alyeska Investment Group and Value Aligned Research Advisors increased their CRWV stakes by 56% and 32%, respectively. Nebius saw serious growth in the number of hedge funds that held it in Q2, going to 85 from 61.

BCA Would Rather Own Big Tech

BCA nevertheless recommends an 80% long position in Microsoft, Alphabet, Meta and Amazon against a 20% short basket of six neoclouds, including CoreWeave and Nebius. The bet is that hyperscalers will earn higher returns on AI capex while neoclouds shoulder more financing and residual-value risk.

While we acknowledge the potential of NBIS and CRWV as investments, we believe certain other AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

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