Nebius vs Nscale

Cramer: AI data center stocks face earnings test

CNBC's Jim Cramer warned that next week's earnings from leading neoclouds CoreWeave and Nebius could further test investor confidence in the AI data center trade. Stocks rebounded after a turbulent election week that saw selling in AI infrastructure names. Cramer remains skeptical, citing unresolved concerns about data center spending and financing. Key upcoming events include Constellation Energy earnings on Monday, CPI inflation data and CoreWeave earnings on Tuesday, Nebius, Cisco, and Applied Materials earnings on Thursday, and the PPI report on Friday. Cramer highlighted CoreWeave's need to explain its expansion financing and debt management, and expects Nebius to show strong orders and completed data centers. The Fed's next move on interest rates, potentially influenced by inflation reports, is also in focus.

• CNBC's Jim Cramer warned that next week's earnings from CoreWeave and Nebius could test AI data center stocks.
• CoreWeave reports earnings on Tuesday after the close.
• Nebius reports earnings on Thursday before the bell.

AI Turmoil: Neoclouds Struggle, Solidigm Pulls IPO

This week saw significant strain in the AI infrastructure trade, with neocloud stocks like CoreWeave, Nebius, and IREN falling sharply, and credit default swap spreads for major tech companies reaching distress levels. CoreWeave's CDS spreads widened past 11%, and its bond yields topped 15%. South Korea's Elice Group dropped 30% on market debut, and Australia's NextDC slashed its earnings forecast, causing a 39.5% stock plunge. SK Hynix's Solidigm unit canceled its IPO due to market volatility. Meta reported negative free cash flow of over $2 billion in Q3 while raising its full-year capex floor to $135 billion, and its CDS spreads hit all-time highs. Gartner predicts 80% of neoclouds will cease operations or be absorbed by 2030. Nvidia CEO Jensen Huang remains optimistic, citing 'off the charts' demand for neoclouds.

• CoreWeave's CDS spreads widened past 11%, considered distress level; bond yields on 2031/2032 notes topped 15%.
• SK Hynix's Solidigm unit canceled its planned IPO due to market volatility, citing market conditions.
• Meta reported negative free cash flow of over $2 billion in Q3 2026 and raised its full-year capex floor to $135 billion.

Nvidia CEO says neocloud demand 'off the charts' but capital scarce

Nvidia CEO Jensen Huang said at the GTC conference in Berlin that demand for neocloud firms is "off the charts," but scarce capital is holding back growth. He emphasized that the mismatch between capital demand and availability will be resolved. Huang also highlighted energy constraints in Europe, stating that allocating power to neoclouds like Nebius and Mistral is crucial for building the AI ecosystem. The company has committed nearly $10 billion to European AI investments, including a $1 billion stake in five UK startups. Neocloud stocks, including CoreWeave and Nebius, have recently declined amid concerns about high spending and debt levels.

• Nvidia CEO Jensen Huang said demand for neocloud firms is 'off the charts' at GTC conference in Berlin.
• Huang stated that scarce capital is the main constraint on neocloud growth, not demand.
• Nvidia has committed nearly $10 billion to AI investments in Europe, including a $1 billion stake in five UK startups.

Aker CEO dismisses Microsoft Nscale contract loss as minor

The CEO of Aker ASA, Øyvind Eriksen, the largest investor in UK AI infrastructure startup Nscale, downplayed Microsoft's withdrawal from a data centre deal as a "minor contract". Speaking during Aker's Q3 results presentation, Eriksen reassured investors ahead of Nscale's planned US IPO targeting a $35bn valuation. He noted that since Nscale's Series C funding round, the company's activity and contract portfolio more than doubled, and the termination was expected. Microsoft cancelled the deal to lease compute capacity from Nscale's Essex data centre due to anticipated power supply issues. Nscale is reportedly close to a new multibillion-dollar deal with Anthropic, which would increase its commitment in West Virginia. Aker owns approximately 23% of Nscale, valued at $3.31bn based on the Series C valuation.

• Aker ASA CEO Øyvind Eriksen called Microsoft's cancellation of a data centre deal with Nscale a 'minor contract'.
• Aker owns approximately 23% of Nscale, valued at $3.31bn based on Nscale's Series C valuation.
• Microsoft cancelled the lease agreement due to expected power supply issues at Nscale's Essex data centre.

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