CoreWeave and other neocloud stocks drop after Microsoft capex comes in below expectations
Shares of CoreWeave, Nebius and IREN fell as Microsoft's lower-than-expected capex figure points to infrastructure partners taking longer to deliver capacity.
TL;DR
- Neocloud stocks like CoreWeave and Nebius fell after Microsoft's capital expenditures (capex) for the quarter were below analyst expectations.
- Microsoft's capex was reported at $45.2 billion, up 30% year-over-year but below the $50.7 billion average analyst estimate.
- The lower capex suggests infrastructure partners are taking longer to deliver data center capacity, impacting companies like CoreWeave and Nebius that are crucial for Microsoft's AI infrastructure.
- Broader market concerns about rising interest rates and debt financing have already pressured neocloud companies.
- Alphabet also reported capex figures below estimates.
- Elon Musk and Gartner analysts have predicted a significant number of neocloud companies will collapse or be absorbed by 2030.
- Oracle's stock initially rose on strong forecasts but retreated after Microsoft's report.